In effect for just over a month, Washington State’s new Covenant Homeownership Program offers a purely racial advantage in homeownership. It’s a classic example of misguided feel-good politics that perpetuates division rather than solving the problems it’s supposed to address. In fact, it’s nothing more than a racist home loan program.
On the surface, the Covenant Homeownership Program, which provides interest-free loans to people from “historically marginalized communities,” may seem like a noble attempt to right the wrongs of past discrimination. It was celebrated in the media this month and earlier this year. But a closer look reveals that this initiative is more about virtue-mongering than promoting true equality. Under eligibility guidelines, a borrower does not even have to prove that he or his family has been a victim of discrimination. Their race alone makes them victims of oppression – a belief widely held among progressives.
The program provides interest-free loans of up to $150,000 for down payment and closing costs to first-time homebuyers who can trace their ancestry to people who lived in Washington before 1968 and who belong to a certain marginalized racial group. They must be either black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian. Although Jews were subject to restrictive covenants, Democrats in the state legislature deemed them unworthy of participating in their home loan program. Jews are viewed by the radical left as privileged whites.
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What is the racist home loan program supposed to achieve?
The Washington State Housing Finance Commission, which administers the Covenant Homeownership Program, claims the loans will help close the wealth gap created by past discriminatory housing practices. But is that really the solution, or is it just another layer of racial preference that excludes people based solely on the color of their skin?
One of the most disturbing aspects of this program is the assumption that people are victims of racism today just because their ancestors may have been. The idea that eligibility for financial assistance should be tied to race is as racist as the policies that supposedly made these loan applicants less likely to afford a home in the first place. It perpetuates the idea that people are defined by their race rather than their individual circumstances; that a poor white or Jewish family is still better off than a rich black or Hispanic family.
This program further divides us instead of bringing us together, and creates resentment toward the needy who are left out because they are not part of a demographic that Democrats can exploit for political power. It’s no wonder Democrats are struggling, especially nationally, among low-income white working-class families.
You don’t even have to show that you are a victim of racism
The program does not require applicants to have personally suffered discrimination; their race is enough to qualify them. This not only undermines the principle of individual responsibility, but it ignores the many non-minority families who have struggled to acquire a home due to financial difficulties unrelated to their race. By focusing solely on race, the Covenant Homeownership Program ignores the complex socioeconomic factors that affect all prospective homebuyers regardless of race.
Furthermore, the admission criteria are shockingly exclusionary.
If you are a white family that has struggled for generations to make ends meet in Battle Ground or Sultan, that is a shame. The benefits of the program are explicitly not for you. This is a program designed to benefit some at the expense of others, based solely on the color of their skin – a concept that runs counter to the ideals of equality and justice that should guide public policy.
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What is the true impact of the racist home loan program?
According to the Washington State Housing Finance Commission, which runs the program, only 19 applicants were approved for loans (including 16 black and one Hispanic applicant). In a state with millions of residents, that hardly seems like a smashing success. If the goal was to substantially reduce homeownership inequalities, this program is clearly not the answer. Rather, it is a costly exercise in virtue that helps a few but does little to address the larger problems.
The racist home loan program also raises a glaring problem. It makes it easier for families to buy a home they cannot afford and favors people who can afford a home without an interest-free loan.
Under the program, an applicant is eligible if they meet the median income (AMI) of the county in which they are buying a home. If a household in King County makes $65,000 total (AMI $147,400) and has little savings, buying a home probably doesn’t make sense yet. If the household makes $147,000 and has a healthy savings account, they probably don’t even need the assistance, even if they would like it (who wouldn’t?).
The program is also incredibly expensive. Each loan is worth up to $150,000 and, while interest-free, must be paid back eventually. But who foots the bill in the meantime? Washington taxpayers, many of whom will never qualify for this aid because they don’t meet the program’s racial criteria. This is a redistribution of wealth based on race, pure and simple, and it is both unfair and unsustainable.
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Racism-based home loan program to combat past racism that we believe impacted prosperity
The justification for this racist mortgage program rests on the assumption that minority groups do not have the generational wealth to buy a home today because of past discrimination. While it is true that discriminatory practices in the past have had lasting effects for some people, that is not true for everyone. Nor is generational wealth a prerequisite for purchasing a home. And a solution should not be to create new forms of racial discrimination in the present.
Instead, we should focus on policies that help all low-income families, regardless of race, to own a home. Programs that provide financial education, credit counseling, and, when necessary, down payment assistance should be available to anyone who needs them, not just those belonging to a particular racial group that politicians in power must appease in order to stay in power.
Washington’s Covenant Homeownership Program is a misguided attempt to right historical wrongs through today’s racial preferences. Will we need another program in 50 years to right the injustices this current program creates? True equality comes from treating everyone fairly and respectfully, not from distributing benefits based on the color of your skin.
Washington State should rethink this program and instead focus on initiatives that help all families, regardless of race, achieve the American dream of homeownership (I admit it is at least refreshing that this program makes it harder for the radical left to claim that homeownership is shaped by a “culture of white supremacy”). The path to equality is not exclusion, but inclusivity (that other buzzword progressives like to throw around), which benefits everyone.
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