Bank of America Offers No-Down-Payment Mortgages To Black and Hispanic

Bank of America announced that it is now giving $0 down payment, and zero closing fee mortgages to first-time homebuyers in a limited set of locations in order to increase homeownership among Black and Hispanic/Latino populations.

The option will first be accessible in select areas of Charlotte, Dallas, Detroit, Los Angeles, and Miami. According to the bank, the new mortgage, known as the Community Inexpensive Loan Solution, intends to assist qualified people and families in obtaining an affordable loan to acquire a property.

A bank spokesperson stated that applicants do not have to be Black or Hispanic to qualify for the program.

Homeownership improves our communities and may help people and families grow wealth over time,” said AJ Barkley, Bank of America’s head of neighborhood and community lending. “Our Community Affordable Loan Solution will assist more Black and Hispanic families to achieve the dream of long-term homeownership, and it is part of our wider commitment to the communities we serve.”

The loans do not need mortgage insurance, which is generally levied to purchasers who put down less than 20% of the purchase price, and there is no minimum credit score requirement. Instead, eligibility will be determined by characteristics such as on-time rent payments, energy bills, phone, and car insurance payments. Before applying for the loan program, prospective purchasers must also complete a homebuyer certification course offered by Bank of America and federally recognized housing counseling partners, according to the bank.

The racial disparity in homeownership rates in the United States remained significant in 2020, the most recent year for which data from the National Association of Realtors are available.

The homeownership rate for white households was 72.1%. In comparison, Hispanic families have 51.1% and Black households have 43.4%. According to the NAR, the Black homeownership rate in 2020 was lower than it was in 2010.

“During the pandemic, rising home prices and a lack of housing supply have disproportionately impacted Black households more than any other race/ethnic group,” the National Association of Realtors (NAR) stated in a report. According to the group, white households are now 40% more likely to be able to afford to purchase a property than black households.

Bank of America and other large financial companies, such as Wells Fargo, have a shady track record when it comes to lending to people of color and potential purchasers with impairments.

Countrywide Financial, a subprime lender bought by Bank of America in 2008, was fined $335 million in 2011 on allegations that it charged Black and Hispanic homeowners greater interest rates than white applicants.

Wells Fargo agreed to pay $175 million in 2012 to resolve charges that it targeted individuals of color with riskier, more costly housing loans. In 2014, the city of Miami sued JPMorgan Chase, accusing the firm of predatory lending in minority areas.

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