Washington state’s race-based home loan program faces federal lawsuit

(The Center Square) – Four months after the launch of Washington’s home ownership program designed for people who previously faced racist housing policies, a federal lawsuit has been filed alleging the commission in charge of the program is unfairly disqualifying applicants in violation of constitutional rights.

The Foundation Against Intolerance and Racism, or FAIR, a national New York-based nonprofit, brought the case this week against the head of the Washington State Housing Finance Commission concerning the Covenant Home Ownership Program.

Filed in the U.S. District Court for the Western District of Washington, the lawsuit claims that the commission has been violating homebuyers’ constitutional rights by limiting who qualifies for the program.

Pacific Legal Foundation is representing FAIR.

“Home ownership and lack of availability of homes is a crisis everywhere and Washington is the fifth worth worst, I think, but instead of going after what is causing the shortage of homes and why people can’t buy homes, the government decides to use race and discriminate against people who just want to have a piece of the American dream,” PLF attorney Andrew Quinio told The Center Square on Thursday.

“We should leave racial discrimination in the past, where it belongs,” he said. “Consider what the American dream is and owning a home and that’s really just fundamental and now this idea that the dream depends on your race and skin color, it’s really just insulting to the American dream and everyone that’s trying to achieve it.”

The Washington State House Finance Commission defended the program in a statement emailed to The Center Square.

“Specifically, the program is aimed at prospective Washington homebuyers whose families were excluded by policies, in place before the passage of the federal Fair Housing Act in 1968, that barred them from financing and/or buying a home due to their skin color or ethnicity,” the statement said.

The email went on to say, “This program is the result of rigorous research. As required by the legislation, an independent national firm studied past housing discrimination in Washington state, how it affected families and its continued impacts today, as well as policies that could ameliorate these impacts.”

The case centers on the Covenant Homeownership Program, which state lawmakers approved in 2023 with a goal of addressing past racist housing policies.

As previously reported by The Center Square, the program offers down payment and closing cost assistance to people who are black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian, who can show that they or a parent, grandparent or great-grandparent lived in Washington before the Fair Housing Act outlawed housing discrimination in April 1968.

“Prior to 1968 you had Japanese internment, you had the Chinese Exclusion Act and both of those things the state studied and we know those deprived communities of home ownership and yet if you look at the list of races that are benefiting from this, Chinese Americans and Japanese Americans are not included for eligibility, despite the discrimination they faced,” Quinio noted.

He continued, “If this is really meant to address past discrimination, you would think that they would ask applicants to document or identify discrimination that their ancestors actually faced.”

Quinio said he is confident that precedent from the U.S. Supreme Court means the law is on FAIR’s side.

“You could hypothetically have a person living in Washington of Chinese descent who had great great-grandparents at the turn of the century who could not buy a home because of laws at the time; it wouldn’t matter because they don’t have the preferred race,” he said.

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