Judge Denies Motion to Halt Racial Equity Mortgage Program

Ruling cites past Supreme Court decisions that found a compelling interest in addressing discrimination.

Published on Feb. 12, 2026

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A federal district court in Washington State denied a request for a preliminary injunction in a lawsuit aimed at halting a special-purpose credit program (SPCP) designed to address racial disparities in homeownership rates. The nonprofit advocacy group Foundation Against Intolerance and Racism (FAIR) had filed suit against the Washington State Housing Finance Commission, claiming the program was unconstitutional. However, the judge sided with the state, noting prior Supreme Court rulings that identified remediation of past discrimination as a 'compelling interest'.

Why it matters

This ruling is significant as it upholds the legality of state-level programs aimed at addressing long-standing racial inequities in homeownership, despite efforts by some groups to challenge such initiatives. It comes as the federal government has moved to roll back various fair lending and diversity policies in recent years.

The details

The Washington State SPCP provides downpayment and closing cost assistance as an interest-free loan to eligible first-time homebuyers. Since its inception in 2021, it has helped 600 individuals purchase their first home, with over 100 currently in the process. SPCPs were introduced after the passage of the Equal Credit Opportunity Act in the 1970s to provide lending products and community investment for disadvantaged groups who may struggle to qualify.

  • The lawsuit was first filed by FAIR in late 2024.
  • The judge's ruling denying the preliminary injunction request was issued this week.

The players

Foundation Against Intolerance and Racism (FAIR)

A nonprofit advocacy group that describes its mission as 'challenging threats to civil liberties from identity-based practices'.

Washington State Housing Finance Commission

The state agency that oversees the special-purpose credit program aimed at addressing racial disparities in homeownership.

Justice John Chun

The federal district court judge who denied FAIR's request for a preliminary injunction to halt the state's mortgage program.

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What they’re saying

“The court does not accept plaintiff's theory that these past acts of discrimination do not support a compelling interest because they were not actions taken by the state but a showing of 'societal discrimination'.”

— Justice John Chun, Federal District Court Judge (Ruling)

“The statistical evidence of discrimination is stark.”

— Justice John Chun, Federal District Court Judge (Ruling)

What’s next

The case will now proceed after the judge's denial of the preliminary injunction request.

The takeaway

This ruling upholds the legality of state-level programs aimed at addressing long-standing racial inequities in homeownership, despite efforts by some groups to challenge such initiatives. It comes as the federal government has moved to roll back various fair lending and diversity policies in recent years.