Key Trump agency unleashes probe on blue state over potential race-based mortgage aid: 'DEI is dead'

The Trump administration's Department of Housing and Urban Development (HUD) announced Tuesday that it launched an investigation into a Washington state housing program the agency accused of potentially providing subsidized mortgage assistance to people based on race. 

The Washington State Housing Finance Commission was alerted this week that HUD's Office for Fair Housing and Equal Opportunity would be investigating its Covenant Homeownership Program. The program was established by the state legislature in 2023, which commissioned a report to investigate alleged housing discrimination in the state and how to remedy it. In particular, the program wanted to address racially restrictive housing covenants embedded in the state's history, which became unenforceable following a Supreme Court ruling in 1948 and were voided altogether in 1969.

The housing program was launched a year later for first-time homebuyers considered "people of color and other historically marginalized communities." It offered zero-interest loans of up to $150,000 for down payments and closing costs, and the loans did not need to be repaid until the homeowners sold or refinanced the properties, according to Seattle King County REALTORS. 

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"Generations of systemic, racist, and discriminatory policies have formed barriers to homeownership for Black, Indigenous, and people of color and other historically marginalized communities in Washington state," Washington Democrat Jamila Taylor said of the bill to establish the program that she helped introduce. "Historically, redlining, racially restrictive covenants, mortgage subsidies and incentives, and displacement have been explicitly outlined practices. To date, racially restricted covenants have been identified in more than 40,000 property deeds across the state."

But according to HUD, applicants in the program do not need to be from low-income areas, as the income ceiling for the program is 120% of the median income for the area. The agency said in order to qualify, applicants have to have a parent or grandparent of Hispanic, Native American, Pacific Islander, or Indian descent. Meanwhile, HUD highlighted that persons of European, Japanese, Arab, or Jewish ancestry did not appear to qualify for the program.

HUD also points out, citing directions from the Washington housing commission on how to apply for the Covenant Homeownership Program, that the only application process for the program is to call a hotline where prospective applicants speak to "a Commission-trained lender" who then determines whether people meet the program's eligibility requirements.

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"DEI is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue," said HUD Secretary Scott Turner. "I will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law … Under President Trump’s leadership, HUD will vigorously enforce the Fair Housing Act and ensure all Americans have an equal shot at the American Dream."

A final determination on whether the program violates the Fair Housing Act is still pending, but HUD said in its letter to the Washington State Housing Finance Commission that the public information currently available "strongly suggests" that unlawful discrimination is taking place.

A spokesperson for the Washington State Housing Finance Commission told Fox News Digital that it planned to cooperate with HUD's requests for information.

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"The Washington State Legislature created the Covenant Homeownership Program with bipartisan support after an extensive stakeholder and community engagement process and it is based on rigorous, independent research by a national firm," the spokesperson added. "Along with the Covenant Homeownership Program, the Washington State Housing Finance Commission has an array of other programs offering home loans and downpayment assistance for all low- and moderate-income homebuyers, so that everyone can be supported on their homeownership journey."

Washington is just the latest state to be pressured by HUD over alleged discriminatory housing polices. Earlier this year, the agency opened an investigation into the city of Minneapolis, alleging its housing policies illegally prioritize resources based on race and national origin. Prior to that, HUD also targeted Boston for alleged DEI in its housing programs.