It seems the federal government frowns on creating state benefits programs that are based on racism.
The Department of Housing and Urban Developments’ Office for Fair Housing has confirmed it is looking to the Washington state Housing Finance Commission’s Covenant Homeownership Program to determine whether it violates the Fair Housing Act.
The federal officials have confirmed they have notified the state of their investigation.
A program called “Racial Equity Strategy Plan” was created by state officials back in 2023, with the intention of advance “antiracist priorities.”
HUD notified the Washington State Housing Finance Commission that it has launched an investigation into the state’s Covenant Homeownership Program — an openly race-based housing finance program. pic.twitter.com/wwREJIVhhf
— Department of Housing and Urban Development (@HUDgov) March 24, 2026
Then came the creation of the Covenant effort, the state agency’s “first-ever openly race-based housing finance program,” according to a government statement.
The department said, “Fair Housing and Equal Opportunity (FHEO) notified the Washington State Housing Finance Commission that it has launched an investigation into the state’s Covenant Homeownership Program, which HUD believes may violate the Fair Housing Act.”
Scott Turner, HUD secretary, explained, “DEI [diversity, equity, inclusion] is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue.”
He continued, “As HUD Secretary, I will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law. HUD will work to ensure Washington state follows the law and provides equal opportunity for all citizens seeking assistance under the Commission’s programs. Under President Trump’s leadership, HUD will vigorously enforce the Fair Housing Act and ensure all Americans have an equal shot at the American Dream.”
State officials set up their program to offer down payment and closing cost money for first-time homebuyers through zero-interest, secondary loans.
“Applicants do not need to be low income, as the income ceiling is 120% of the area median income. Low-income borrowers qualify for complete loan forgiveness after owning the house for five years,” HUD said.
But of concern is a state demand: “To qualify for the program, applicants must have a parent or grandparent of black, Hispanic, Native American, Pacific Islander, or Indian descent. Persons of European, Japanese, Arab, or Jewish ancestry do not appear to qualify.”
The federal government’s letter to Steve Walker, chief of the state program, informed him that the federal law “categorically prohibits every entity engaged in ‘residential real estate-related transactions’ from discriminating against ‘any person’ in the availability or ‘terms or conditions of such a transaction because of race … or national origin.’”
The letter warned, “In the Commission’s view, it appears that some Washingtonians ‘are more equal than others.’ This government-sponsored housing experiment appears to dole out spoils based on race and ancestry—’some racial groups [are] eligible and not others.’ Only applicants with a black, Hispanic, indigenous, pacific islander, or Asian Indian parent or grandparent can qualify. The Commission, thus, requires ‘documentation’ establishing that the applicant has the correct racial heritage. Washington residents of European, Japanese, Arab, and Jewish ancestry—no matter their income—appear to be ineligible for the program.
“Let me be clear: Illegal discrimination on the basis of race is morally reprehensible, socially perverse, and destructive of America’s pluralistic polity. The Trump Administration will not tolerate it. Not now. Not ever,” the letter said.