The Covenant Homeownership Act: A History of Racism in Housing, A Commitment to Make it Right
In 2023, thanks to the advocacy and leadership of the Housing Development Consortium, the Black Home Initiative, Rep. Jamila Taylor, Sen. John Lovick, and Rep. Frank Chopp, the Washington State Legislature passed the Covenant Homeownership Act. The act created a new program and funding source to help people become homeowners who have been impacted by state-sanctioned racial discrimination in housing. In 2025, the state Legislature amended the act through H.B. 1696, increasing the eligible homebuyer income limit and allowing for loan forgiveness for some program participants.
The term “covenant” refers to the racially restrictive clauses used in neighborhoods throughout the state of Washington in order to keep people out based on their race or religion. The Covenant Homeownership Act represents a new commitment to correct this injustice (and others such as redlining) and help families begin building wealth through homeownership.
Key Points:
- Purpose: Provides low-interest mortgage financing and down payment/closing cost assistance to help low- and moderate-income households buy homes.
- Target borrowers: First-time buyers and others who meet income and purchase-price limits; some programs allow repeat buyers if household income qualifies.
- Income & purchase limits: Household income and home price limits apply and vary by county and family size; limits are set to target moderate- and low-income households.
- Loan features: Competitive fixed-rate mortgages through participating lenders; may include reduced mortgage insurance requirements.
- Down payment/closing cost assistance: Often available as a second mortgage or deferred loan (forgivable or repayable under program rules) to cover down payment and closing costs.
- Property types eligible: Single-family homes, condos that meet commission/underwriter requirements, and sometimes townhomes; owner-occupancy required.
- Credit requirements: Flexible credit standards compared with conventional loans, but borrowers must demonstrate ability to repay; specific credit score guidelines depend on lender and program variant.
- Homebuyer education: Completion of an approved homebuyer education course is typically required for certain assistance amounts.
- Resale/recapture restrictions: Some assistance has resale or recapture provisions to preserve affordability; terms vary by assistance type.
- Application process: Apply through participating lenders who submit to WSHFC; lenders can provide exact limits, eligible properties, and available assistance options.
- Where to get details: https://heretohome.org/covenant/
