Bank of America (NYSE: BAC) is offering home buyers new zero down payment, zero closing cost mortgage products geared towards closing the homeownership gap within Black and Hispanic Latino communities. The move intends to help minority communities purchase their first homes.
The novelty will be available in select neighborhoods including Charlotte, Dallas, Detroit, Los Angeles, and Miami. According to the bank, the Community Affordable Loan Solution is geared toward helping individuals and families attain an affordable loan to purchase a home.
“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 will not require a minimum credit score or mortgage insurance, which is usually mandatory when buyers put less than 20% of the purchase price. Ultimately, qualified buyers will be approved based on factors such as timely rent payments and on-time utility bills, and phone and auto insurance payments.
“During the pandemic, rising home prices and low housing supply have disproportionally impacted Black households more than any other race/ethnic group,” the NAR said in a report. The association confirmed that White households are now more likely to be able to afford to buy a home in comparison to Black families.