PERSPECTIVE: Covenant Homeownership Act Yields Results

Contributed by Marissa Beach, SKCR Director at Large

In the spring of 2023, thanks to the advocacy and leadership of Washington REALTORS®, the Housing Development Consortium, the Black Home Initiative, Rep. Jamila Taylor, Sen. John Lovick, and Rep. Frank Chopp, and countless others, the Washington State Legislature passed the Covenant Homeownership Act with bipartisan support. The act creates a new program and funding source to help Washington residents who have been impacted by redlining and racial discrimination to become homeowners.

I am proud to have been the fourth real estate broker in Washington State to close a transaction utilizing the Covenant Homeownership Program. My clients were first-time homebuyers who qualified for its assistance because of historical discrimination in their family history.

Becoming a homeowner isn’t easy for many buyers, but it is especially difficult for first-time homebuyers whose previous generations experienced discrimination. Many were told they could not qualify for a mortgage due to their race, ethnicity, gender identity, immigration status, etc. Even in Washington State, minority groups were sometimes restricted in where they could live.

This discrimination has had a lasting negative impact on the financial well-being of today’s homebuyers. According to annual data compiled by the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America (AREAA), the National Association of Real Estate Brokers (NAREB), The LGBTQ+ Alliance, Freddie Mac, and others, minorities continue to face many barriers to homeownership in today’s market. Continuing barriers for many of these communities include access to credit, the income and generational wealth gap, and appraisal discrimination.

The Covenant Homeownership Program (est. July 1, 2024) is managed by the Washington State Housing Finance Commission (WSHFC) and funded by document recording assessments. Qualified applicants to the program can receive downpayment and closing cost assistance for up to 20% of the home price in the form of a second loan. These funds do not have to be paid back to the Commission until the homebuyers/owners sell, refinance, or rent out their primary residence.

While my transaction was successful, it didn’t come without lots of heavy lifting on part of the homebuyers. Proving lineage and residence is an important part of the application process, but family genealogy can be a very sensitive topic. Sometimes where historical records were purposely hidden, confiscated, and/or modified for the sake of safety and survival, homebuyers might struggle finding all the needed documents to prove their history of residence and racial identity. My homebuyers spent countless hours digging for family records: online, asking relatives, pulling everything and anything they could find. They were questioned about the change in family last names, which seems ironic since many minorities changed their last names not only due to marriage but also to avoid discrimination and danger.

It was quite a humbling experience all around for everyone involved. But despite all the odds, despite their struggles, despite wanting to give up due to the administrative barriers they faced, they did it. I am so proud of the way that my clients stuck it through. Their lives will be forever changed because of homeownership, thanks to the Covenant Homeownership Program.