Governor Signs Taylor Bill Expanding Historic Covenant Homeownership Program
April 22, 2025
Governor Ferguson signs Second Substitute House Bill No. 1696, April 22, 2025. Relating to modifying the covenant homeownership program by adjusting the area median income threshold for program eligibility, introducing loan forgiveness, and modifying the oversight committee membership. Primary Sponsor: Rep. Jamila Taylor
Olympia, WA – Today Governor Ferguson signed
Second Substitute House Bill 1696 (SSHB 1696) into law, expanding the Covenant Homeownership Program originally introduced by Rep. Jamila Taylor (D-Federal Way) and passed in 2023.
Launched in 2024, the Covenant Homeownership Program provides zero-interest loans to help first-time homebuyers cover down payments and closing costs. To date, the program has enabled over 200 families in more than 20 counties to access homeownership.
Currently, about 69% of white households in Washington own their homes, compared to just 34% of Black households. This disparity persists across income levels, with the most significant gap seen among households earning less than $50,000 annually.
“Expanding this program is a step toward closing the homeownership gap between Black and white households in our state,” said Rep. Taylor. “It’s not the only solution to the systemic inequities caused by centuries of discrimination, but it is meaningful progress.”
The expansion includes:
- Income eligibility raised from 100% of the area median income (AMI) to 120%.
- Loan forgiveness after five years for households earning 80% or less of AMI.
- Oversight Committee membership changed to include a representative from a nonprofit housing counseling organization.
In a housing market marked by low inventory and escalating home prices, raising the AMI threshold is a vital change that will allow more Washingtonians—especially those historically excluded from homeownership—to build intergenerational wealth.
Although racially discriminatory practices such as redlining and restrictive covenants were formally outlawed in the U.S. in 1968, the impacts continue to be felt.
“The policies may have changed fifty years ago, but the harm to individuals and communities continues,” said Rep. Taylor. “We are not immune to racism or discrimination—but I believe Washington is committed to correcting the injustices of the past.”
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