Residents in selected Charlotte, Dallas, Detroit, Los Angeles and Miami neighborhoods will be offered the program first.
A pedestrian walks past Bank of America ATMs in San Francisco on Jan. 23, 2020.Alex Tai / LightRocket via Getty Images file
Sept. 1, 2022, 2:55 AM AEST
By Rob Wile
Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities.
The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said.
Applicants do not have to be Black or Hispanic to qualify for the product, a bank representative said.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” AJ Barkley, head of neighborhood and community lending for Bank of America, said in a release. “Our Community Affordable Loan Solution will help make the dream of sustained homeownership attainable for more Black and Hispanic families, and it is part of our broader commitment to the communities that we serve.”
The loans require no mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price — and no minimum credit score. Instead, eligibility will be based on factors like timely rent payments and on-time utility bill, phone and auto insurance payments. Prospective buyers must also complete a homebuyer certification course provided by Bank of America and federally approved housing counseling partners before they apply for the loan program, the bank said.
The racial gap in homeownership rates in the U.S. remained substantial in 2020, the most recent year for which National Association of Realtors data are available.
For white households, the homeownership rate was 72.1%. That compares with 51.1% for Hispanic households and 43.4% for Black households.
The Black homeownership rate was lower in 2020 than it was in 2010, the NAR said.