What is Washingtons Covenant Program – and can it help you?

The best way to build generational wealth is through homeownership, but for many, it feels like you can only “get in” if you already have generational wealth behind you. 

The passage of the Federal Fair Housing Act in 1968 was intended to address the gap between communities of color and white communities access to housing – and ability to build wealth in their neighborhoods. 

Up until the Acts historic passage in 1968, many restrictive covenants forbade the selling of their home to people of color, and even forbade people of color from living in certain neighborhoods. In 2022, 40,000 deeds still had this language, although the covenants are no longer enforceable.

A University of Washington 2019 study found the rate of homeownership for white communities in Washington was 68%, while Black communities were at 31%, Hispanic and Latino communities 45%, and Asian Pacific Islanders are at 60%.

In order to address these gaps and move towards reparative justice, Washington passed the Covenant Homeownership Act.

This act offers a zero interest loan of 20% of the purchase price towards a downpayment, or $150,000 towards a downpayment, whichever is lower, plus closing costs. It can be used in addition to other loan programs, and even potentially increase your qualifying purchase price! 

In order to qualify:

• You must belong to an eligible group based on historic and current homeownership disparities, which the act defines as Black, Hispanic, Native American, Alaska Native, Native Hawaiian, Other Pacific Islander, Korean, or Asian Indian. 

• You must make 100% or less of the areas median income ($147,400 in King County).

• You must have documentation that a family member of an eligible group lived in Washington State during or prior to 1968. 

This program opens the doors to homeownership, and the potential of generational wealth, to many Washingtonians! If you would like to learn more, and see if you qualify, I am always here to help!