On March 24, 2026, the Department of Housing and Urban Development (“HUD”) announced that it is launching an investigation under the federal Fair Housing Act into a state-sponsored special purpose credit program (described below) that reportedly uses race as an eligibility factor.

The Washington Homeownership Resource Center runs the Covenant Homeownership Program (the “Program”), which the state legislature created in 2023 to “address the history of housing discrimination due to racially restrictive real estate covenants in Washington state.” The Washington legislation provides that generations of systemic “redlining, racially restrictive covenants, mortgage subsidies and incentives” created barriers to mortgage credit and homeownership for black, indigenous, and people of color and other historically marginalized communities in Washington. To remedy those circumstances, the legislature created a down payment and closing cost assistance program for eligible first-time homebuyers, repayable upon the sale or refinancing of the home, and forgivable after a period of time for certain eligible households.

According to the Program’s website, persons eligible for the Program are those who lived in the state before 1968 (or have a parent or grandparent who did), are first-time homebuyers who meet the income guidelines (up to 120% Area Median Income), and are a member of a racial group identified through the organization’s mandated study.

HUD asserts that the Program may violate the Fair Housing Act, which prohibits housing and mortgage financing discrimination based on race, among other factors. HUD Secretary Turner stated that the agency will vigorously enforce the Act and seek to eliminate illegal racial preferences.