In a progressive move to address the long-lasting impacts of racist housing covenants, Washington state has introduced the Covenant Homeownership Program, aimed at providing prospective homebuyers from historically marginalized communities with zero-interest loans of up to $150,000. This initiative seeks to alleviate one of the most significant barriers to homeownership—down payments and closing costs.
Administered by the Washington State Housing Finance Commission, the program is designed for individuals who are adversely affected by discriminatory housing deeds that once prohibited the sale of homes to various minority groups in the state. Borrowers will repay the loan upon selling or refinancing their homes, making it a flexible option for first-time buyers.
As of Thursday, 34 individuals from the Puget Sound area have applied for the zero-interest down payment loans, with six applicants currently in the mortgage closing phase. The program is seen as a crucial step toward bridging the wealth gap that has persisted in minority communities due to the legacy of exclusionary practices in housing.
The passage of the federal Fair Housing Act in 1968 abolished the legal power of these racist covenants; however, their effects have reverberated through generations, leaving many first-time homebuyers without the financial support often provided by family and friends. This lack of generational wealth has made homeownership a distant dream for many.
On Wednesday, a significant milestone was reached when a family closed on a $719,000 home with the assistance of a $143,800 zero-interest down payment loan from the Covenant Homeownership Program. Movement Mortgage financed the remaining costs, demonstrating the program’s potential to enable families to achieve homeownership.
While the Covenant Homeownership Program serves various racial communities, it was inspired by the Black Home Initiative, a coalition of nonprofits and community organizations dedicated to addressing the growing racial disparities faced by Black prospective homebuyers.
To qualify for the program, applicants must meet specific criteria:
– Households with an income at or below 100% of the Area Median Income.
– First-time homebuyers.
– Individuals who lived in Washington state before April 1968 or have a parent, grandparent, or great-grandparent who lived in the state during that time.
– The individual who lived in Washington prior to April 1968 must belong to a historically marginalized group, including Black, Native American, Hispanic, Alaska Native, Native Hawaiian or other Pacific Islander, Korean, or Asian Indian.
For those interested in applying for the Covenant Homeownership Program, the Washington State Homeownership Hotline can be reached at 1-877-894-4663.
This innovative program represents a significant step forward in rectifying historical injustices in housing, providing hope and opportunity for future generations of homebuyers in Washington state.
