Bank of America has chosen five cities to pilot a new nationwide program aimed to help first-time homebuyers in Black and Latino communities.
The Community Affordable Loan Solution will offer home loans with no down payment or closing costs. The program’s credit guidelines are based on factors such as timely rent, utility, phone and auto insurance payments, and it does not require mortgage insurance or a minimum credit score.
It will be available in African-American/Black and Hispanic/Latino communities, as defined by the U.S. Census, in Dallas, Charlotte, N.C., Detroit, Los Angeles and Miami.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” said AJ Barkley, head of neighborhood and community lending for Bank of America, in a statement. “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.”
Eligibility is based on income and home location. Prospective buyers are required to complete a homebuyer certification course provided by Bank of America and HUD-approved housing counseling partners before applying.
The program is in addition to the bank’s existing $15 billion commitment to help 60,000 individuals and families buy homes by 2025 through affordable mortgages, grants and educational opportunities. The bank has so far helped more than 36,000 homebuyers, providing $9.5 billion in low down payment loans and more than $350 million in down payment and closing cost grants.
Racial disparities have long existed in homeownership. According to a National Association of Realtors report earlier this year, the homeownership rate for white Americans has been consistently around 70% since 2017. During the same period, only 41% of Blacks and 47% of Hispanics owned homes.
Blacks are the only racial or ethnic group with a lower homeownership rate than a decade ago, the NAR report said.
Bank of America also announced the launch of another program targeted at minority and women business owners, allowing them to purchase commercial real estate through grants. That program will launch in Dallas, Atlanta, Chicago, Charlotte, N.C., and Los Angeles and is planned to expand next year.
The bank ranks second in market share for Dallas-Fort Worth deposits behind Charles Schwab. The Charlotte-based bank had $130.8 billion in deposits and 137 offices in D-FW as of June 30, 2021, according to the most recent data available from the Federal Deposit Insurance Corp.
