Bank of America announced that first-time homebuyers will be able to get a mortgage with no down payment and no closing costs in certain markets.
Residential Mortgage Program for African American & Hispanic Communities
This includes certain Black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami. The goal of the Community Affordable Loan Solution™ is to help people and families who qualify get an affordable loan to buy a house.
The Community Affordable Loan Solution is a Special Purpose Credit Program that uses credit guidelines based on things like paying rent, utilities, phone, and auto insurance on time. It does not need a minimum credit score or prime mortgage insurance (PMI). Each person's eligibility is based on income and where they live. Before they can apply, people who want to buy a home must take a course from certain Bank of America and HUD-approved housing counseling partners.
This new program is in addition to and works with Bank of America's existing $15 billion Community Homeownership Commitment™, which aims to help 60,000 individuals and families buy affordable homes by 2025 through affordable mortgages, grants, and educational opportunities.
The Real Estate Race Gap
According to the National Association of Realtors, the homeownership gap between white and black Americans is nearly 30 percentage points, and the gap between white and Hispanic buyers is nearly 20 percentage points. And the fact that the housing market is so competitive has made it even harder for people, especially people of color, to buy homes.
"Homeownership strengthens our communities and can help individuals and families to build wealth over time," said AJ Barkley, head of neighborhood and community lending at Bank of America.
"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."
In addition to making it easier for people to get credit and help with down payments, Bank of America offers additional resources to help people through the process of buying a home:
Bank of America Down Payment Center: a website that helps homebuyers in their area find state and local programs that help with down payments and closing costs.
Bank of America Real Estate Center: a website that helps people looking to buy a home find properties. Properties that may be eligible for Bank of America's grant programs and Community Affordable Loan Solution™ are marked with flags.