The Justice Department asked a federal judge on June 16 to halt the Restorative Housing Program in Evanston, Illinois. It is the first government reparations program for Black Americans in the United States. Federal attorneys joined a lawsuit that calls the program unconstitutional because it directs money by race, according to the Associated Press.
Evanston launched the program in 2021. The city set aside funds for Black residents, and their direct descendants, who lived in Evanston between 1919 and 1969. City ordinances and practices had harmed those families. Each eligible family can receive a grant of up to $25,000. The money goes toward a down payment, a home repair, or mortgage interest and penalties on a property in the city. Evanston has paid about $5 million to 212 residents so far.
The city’s mayor said Evanston stands behind the program and expects it to hold up in court. The case moves forward now with the federal government backing the residents who first sued to stop it. The court has not yet ruled on whether the program can keep paying out while the case proceeds.
The Grants Were Intended to Repair Decades of Housing Discrimination
The Evanston grants address one kind of harm. Decades of housing discrimination cost Black families home value and the chance to own at all. That loss still shapes household wealth.
A home is the largest source of wealth for most families. The Federal Reserve’s 2022 Survey of Consumer Finances reported that the typical White family held about $285,000 in wealth. That is roughly six times the wealth of the typical Black family. Home equity drives much of the gap. A family shut out of homeownership loses a place to live and the main asset families pass down.
Wealth and income are not the same thing. A family can earn a steady paycheck and still hold almost nothing in savings or property. Wealth is what remains after debts, and it is what a family draws on in a crisis or hands to the next generation. A grant tied to a home builds the kind of wealth a paycheck alone rarely creates.
Income still sets the starting line. The U.S. Census Bureau’s 2024 Current Population Survey reported a median income of $56,490 for Black households. That sits about $28,140 below the $84,630 median for White households. Lower income leaves less to save for a down payment. A family that cannot clear the down payment never reaches the closing table, and the wealth that ownership builds never begins. A $25,000 grant is built to close that exact gap.
The Impact of Redlining
The harm Evanston points to has a paper trail.
Between 1935 and 1940, the Home Owners’ Loan Corporation graded neighborhoods in more than 200 American cities. Examiners colored each area by lending risk. Green meant safe for loans. Red meant hazardous. The agency marked neighborhoods with Black residents as hazardous almost without exception, and lenders avoided the red zones for decades. The original maps now sit in the National Archives, and researchers have matched them to neighborhoods that remain economically distressed today.
The grades did more than describe neighborhoods. They steered money. Families inside the green lines could borrow, buy, and build equity that grew across generations. Families inside the red lines could not. The word redlining comes from those maps. Evanston was one of the many cities where local ordinances and lending patterns followed the same logic between 1919 and 1969, the exact window the reparations program covers.
Redlining became illegal under the Fair Housing Act of 1968. But while the maps stopped, the neighborhoods they shaped did not reset. A family kept out of a green zone in 1950 had no equity to pass to a child buying a first home in 1985, and that child had less to pass on in turn. The gap compounded the way interest does except in this case putting Black families at a disadvantage, quietly and across decades.
The Impact to Generational Wealth
The harm continues after a family buys.
Research from the Brookings Institution found that owner-occupied homes in majority-Black neighborhoods are undervalued by about $48,000 each on average. Across the country that adds up to roughly $156 billion in lost value. The same research drew on Federal Housing Finance Agency data. It found homes in Black neighborhoods valued 21 to 23 percent below what they would be worth in similar non-Black areas.
For one family, a $48,000 undervaluation means a smaller loan they qualify for and a lower price when they sell. It also means less equity to borrow against for a business, a child’s tuition, or an emergency room bill. A low appraisal can sink a sale entirely, because a lender will not finance more than a home is judged to be worth. The buyer either covers the gap in cash or walks away.
The Evanston grant of $25,000 covers about half of that average loss. The money goes back toward the same wall that devaluation built. A family that puts it toward a down payment turns a one-time grant into the start of equity that grows on its own.
Getting the Loan in the First Place
A down payment opens one door. The mortgage opens the next, and the second door is harder for Black applicants to walk through.
The Federal Reserve Bank of Minneapolis examined confidential federal mortgage data covering millions of applications. It found that a Black applicant is more likely to be denied than a White applicant with the same income and the same credit score, applying for a similar loan on a similar home. The gap held after the researchers accounted for the financial details lenders say they rely on.
A denial is not the end of the cost. An applicant turned down by one lender may give up, or take a higher-rate loan from a lender that charges more. Both paths drain money that could have gone toward equity. A family that pays a higher rate for thirty years pays tens of thousands more for the same house than a neighbor with a lower rate, and owns less of it at any given point along the way.
This is why a grant tied to a single transaction does not erase the larger pattern by itself. Evanston’s program helps a family clear one specific hurdle. The denial gap shows the hurdles that wait on either side of it.
How the Evanston Program Was Designed
The program intended on reaching two groups: Black residents who lived in Evanston between 1919 and 1969 and faced housing discrimination tied to city policy; and their direct descendants. Evanston also lets residents harmed by the city’s practices after 1969 apply, if they can document the harm.
The grant cannot be taken as cash. It must go to a home: a down payment, a repair, or mortgage interest and penalties on a property in the city.
The money comes from local tax revenue rather than a federal check. Evanston funded the program through its share of cannabis sales taxes and a tax on real estate transfers. That funding choice keeps the program under city control, which is part of why it became a test case watched far beyond Illinois.
The Ongoing Legal Fight
The lawsuit started before the federal government joined it. In 2024, descendants of non-Black residents who lived in Evanston during the covered years sued the city. They argued they were shut out of the program because of their race.
The Justice Department moved to join that suit on June 16. Federal attorneys argue the program violates the Equal Protection Clause of the Fourteenth Amendment and the Fair Housing Act, the same 1968 law that banned redlining. The government’s position is that paying residents based on race treats people as members of a racial class rather than as individuals.
Evanston answers that the program is not based on race alone. The city argues it compensates a specific, documented harm tied to its own past ordinances, the same way earlier programs compensated Japanese Americans held in internment camps and Chicago residents tortured in police custody. The chair of Evanston’s reparations committee, the former alderman who proposed the program, called the federal challenge a fear tactic. A federal judge declined to dismiss the case in March, which let it move toward a full hearing.
The outcome of the case would likely have implications outside of Evanston. Several cities and states have studied local reparations programs of their own, and they have watched Evanston as the model. A ruling against the program would narrow the path those efforts can take. A ruling for it would leave the first template standing.
The Families Still Waiting in Line
A court order would land on real households mid-process. The program pays out slowly, because it spends only the tax revenue it collects each year. Evanston has pledged $20 million in total and pays roughly 40 grants a year.
The city has verified hundreds of direct descendants who qualify and has not yet reached most of them. Funding arrives in pieces, so the city pays families in the order they were approved and tells them the money comes as revenue allows. A descendant approved last year may still be waiting for a check. An older resident from the 1919 to 1969 period may be waiting too, and some have died before their turn arrived.
A halt would freeze that line. The families already paid would keep their grants, but the ones still waiting would hold an approval with no payment behind it. For a household counting on $25,000 toward a down payment or an overdue mortgage, the difference between a paused program and a canceled one is the difference between a delay and a loss.
Down Payment Help Beyond Evanston
Beyond Evanston, down payment help for a first time home exists across all fifty states.
The Department of Housing and Urban Development keeps a directory of homebuying programs. An applicant picks their state and reaches the housing finance agency for that state. The agency lists local grants, forgivable loans, and below-market mortgages. Most programs serve first-time buyers. HUD defines that as someone who has not owned a home in the past three years. Programs also set income limits tied to the area median income, so a buyer confirms the local ceiling before applying.
HUD also funds free housing counseling agencies. A counselor walks a buyer through eligibility before any application. These counselors often know about local funds that never show up in a general search. A resident can find one through HUD’s counselor directory, listed by state and county. Counselors confirm which programs a buyer qualifies for, what each requires, and which lenders accept the help.
A forgivable loan is also worth a close look. Many state and a few city programs structure their help as a loan that is erased over time, often once the buyer has stayed in the home for a set number of years. The buyer owes nothing if they meet the term. That structure turns a loan into a grant for a family that plans to stay put, which describes most first-time buyers.
State agencies set their own credit and income rules, but grant size varies widely by location. A buyer in one state may qualify for ten percent of the purchase price while a buyer next door qualifies for a flat few thousand dollars. A counselor can confirm the current terms before a buyer commits to a lender or a home.
Sources
Associated Press; Federal Reserve Survey of Consumer Finances (2022); U.S. Census Bureau Current Population Survey (2024); National Archives and Records Administration; Brookings Institution; Federal Housing Finance Agency; Federal Reserve Bank of Minneapolis; U.S. Department of Justice; U.S. Department of Housing and Urban Development
