HUD investigates Washington housing program over fair housing concerns

Federal agency says race-based Covenant Homeownership Program appears to violate Fair Housing Act

Mar. 25, 2026 at 4:02am

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The U.S. Department of Housing and Urban Development has launched a fair housing investigation into the Washington State Housing Finance Commission's Covenant Homeownership Program, which provides home loans limited to racial minorities. HUD argues the program appears to violate the Fair Housing Act by discriminating on the basis of race.

Why it matters

The investigation raises concerns about potential racial discrimination in a state-run housing assistance program. The Fair Housing Act prohibits discrimination in real estate based on protected classes like race, and the HUD probe could lead to charges if violations are found. This case highlights ongoing debates around the use of race-based policies to address historical housing inequities.

The details

HUD's Office of Fair Housing and Equal Opportunity notified the state Housing Finance Commission that the Covenant Homeownership Program, created by the state legislature in 2023, appears to 'dole out spoils based on race and ancestry.' The program offers 0% interest loans for down payments and closing costs to first-time homebuyers who have a parent, grandparent or great-grandparent that lived in Washington before 1968 and is Black, Hispanic, Native American/Alaska Native, Native Hawaiian, Pacific Islander, Korean or Asian Indian. HUD argues the program excludes other racial groups like European, Japanese, Arab and Jewish ancestry.

  • The Covenant Homeownership Program was created by the Washington state legislature in 2023.
  • In 2025, the program's eligibility was expanded by state Democrats to include first-time homebuyers with household incomes at or below 120% of the Area Median Income.
  • HUD launched its fair housing investigation into the program on March 24, 2026.

The players

Washington State Housing Finance Commission

The state agency that administers the Covenant Homeownership Program.

Craig Trainor

Assistant secretary of HUD's Office of Fair Housing and Equal Opportunity, who notified the state commission of the investigation.

Steve Walker

Executive director of the Washington State Housing Finance Commission.

Jamila Taylor

Democratic state representative who sponsored the 2025 expansion of the Covenant Homeownership Program.

Scott Turner

U.S. Secretary of Housing and Urban Development under the Trump administration.

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What they’re saying

“This government-sponsored housing experiment appears to dole out spoils based on race and ancestry.”

— Craig Trainor, Assistant Secretary, HUD Office of Fair Housing and Equal Opportunity

“Expanding this program is a step toward closing the homeownership gap between Black and white households in our state. It's not the only solution ... but it is meaningful progress.”

— Jamila Taylor, State Representative

“DEI is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue. I will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law.”

— Scott Turner, U.S. Secretary of Housing and Urban Development

What’s next

A federal judge will decide whether to grant a preliminary injunction against the Covenant Homeownership Program as the HUD investigation continues.

The takeaway

This case highlights the ongoing tensions between efforts to address historical housing discrimination and fair housing laws that prohibit racial preferences. The HUD probe could have significant implications for the future of the Covenant program and similar race-based housing initiatives across the country.