July 30, 2025
Dear Partners,
We are writing to provide you an update on the lawsuit challenging the Covenant Homeownership Program, which was filed in federal district court December 2024.
The plaintiff (the organization that filed the lawsuit against the program) has recently filed a motion for a preliminary injunction, seeking to change the eligibility criteria for the program. The issue will need to be briefed and ruled on by the court. Based on the current schedule, no determination will be made before August 22, at the earliest, and could be months away.
We will continue to operate the Covenant program as usual, unless and until there is a court decision to the contrary. We encourage you to continue reserving loans under this program.
To set your borrowers up for success, remember to:
1. Prepare your borrowers. Have all their paperwork and documentation in place to ensure a smooth closing. Be honest with them so they understand that up until closing there are no guarantees—but that once the loan is closed, the home is theirs.
2. Check family histories with our staff. Gather your borrower’s documentation of family history and send it to us prior to going to contract so we can help you establish eligibility. This will save you time!
3. Close quickly in 30 days or less. Do as much preparation as possible early on so your borrower can close quickly.
4. Have a backup plan. Put a financing contingency in place, and keep it in place all the way through closing.
5. Keep in touch. Be sure to read program announcements and check our Covenant page for FAQs and updates.
Again, we plan to continue the Covenant program while defending it in court. A decision could well be many months in the future. We will keep you posted of any changes.
Please understand that we won’t be able to discuss this lawsuit with you – but don’t hesitate to reach out to us with any questions about the program!
Thank you for your partnership in this important and historic program!
If you have any questions, please email Lisa DeBrock or Corinna Obar.