National Fair Housing Alliance Applauds Federal Court Ruling Upholding Washington Special Purpose Credit Program
FOR IMMEDIATE RELEASE:
National Fair Housing Alliance Applauds Federal Court Ruling Upholding Washington Special Purpose Credit Program
WASHINGTON, D.C.—The National Fair Housing Alliance® (NFHA™) celebrates a major federal court ruling refusing to block Washington State’s Covenant Homeownership Program, a Special Purpose Credit Program (SPCP) designed to reduce longstanding racial injustices in homeownership. The ruling marks a significant legal milestone for SPCPs nationwide, which were established under the Equal Credit Opportunity Act in 1976.
Earlier this week, U.S. District Judge John H. Chun denied the plaintiff’s request for a preliminary injunction to stop the Covenant Homeownership Program, finding the group did not meet sufficient burden to show that they would likely prevail in their lawsuit. Judge Chun concluded that Washington State has a compelling interest in addressing its documented history of discrimination—including redlining, racially restrictive covenants, government takings, exclusionary zoning, and more—that helped create today’s racial homeownership gaps throughout the state. Since launching in 2024, the Covenant Homeownership Program has already provided down payment and closing cost assistance to more than 1,100 first-time homebuyers whose families were excluded from the opportunity to own a home because they are Black, Latino, Native American, Alaskan Native, Native Hawaiian, Pacific Islander, Korean, or Asian Indian.
NFHA was commissioned by Washington State to conduct the study of its history of discrimination in housing. We welcome this ruling as a critical affirmation that states can adopt narrowly tailored programs to remedy the well-documented racial harms created by government action. SPCPs are among the most effective tools available to expand access to sustainable homeownership and correct historic inequities that continue to shape credit markets today.
The decision comes at a pivotal moment. The Trump Administration has proposed regulatory changes that would weaken or eliminate SPCPs among private lenders, even as they continue to demonstrate strong, measurable impact. From 2022 to 2024 alone, SPCPs helped reduce borrowing costs by $82 million for more than 57,282 consumers of all races and helped to generate $17.2 billion in economic activity as part of Fannie Mae and Freddie Mac’s Equitable Housing Finance Plans. These programs are essential for first-generation homebuyers who lack up-front capital for a downpayment because their families were excluded from fair access to homeownership.
In addition, the Federal Housing Finance Agency (FHFA) recently announced the repeal of its Fair Lending, Fair Housing, and Equitable Housing Finance Plans Regulation. The elimination of this fair lending rule removes compulsory fair housing standards for Fannie Mae and Freddie Mac (the Enterprises), two of the nation’s largest financial institutions. These regulations required the Enterprises to develop Equitable Housing Finance Plans aimed at overcoming longstanding barriers to homeownership faced by underserved communities. Without these binding requirements, accountability is replaced with voluntary action, putting critical tools like SPCPs at risk of neglect or rollback and jeopardizing the gains they have generated for families denied access to fair and affordable credit.
NFHA is leading national efforts to defend these critical tools. Recently, NFHA organized a coalition of 78 civil rights, fair housing, and consumer advocacy organizations urging the Consumer Financial Protection Bureau not to implement a proposed rule that would dismantle key Equal Credit Opportunity Act protections, functionally block SPCPs among private lenders, and open the door to algorithmic discrimination and modern-day redlining.
“This ruling underscores exactly why SPCPs are needed,” said Lisa Rice, NFHA President and CEO. “Decades of documented discrimination have created the inequities we see in today’s housing and credit markets. Special Purpose Credit Programs are lawful, effective, and essential to ensuring that all people can fairly access safe and affordable credit. This decision is a powerful reminder that the law supports efforts to correct injustices that are long-lasting. NFHA will continue fighting to protect these vital tools from harmful and unlawful rollbacks.”
The nation’s fair and affordable housing crisis requires inclusive and innovative solutions like SPCPs and vigorous defense of our essential fair lending protections to ensure that no community is shut out of the American Dream. NFHA will continue working with partners across the country to advance progress.
For interviews, please e-mail NFHA Senior Advisor for Communications, Marketing, and Education Julian Glover at JGlover@NationalFairHousing.org
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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.