Bank of America announces measures to boost Black, Hispanic homeownership
Bank of America has announced a new effort aimed at bolstering homeownership opportunities in Black and Latino communities, with plans to offer zero down payment and zero closing cost mortgage options in certain neighborhoods.
The bank said the new options, announced this week, will be offered in Black and Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami, as well other markets.
Bank of America says its effort, dubbed the Community Affordable Loan Solution, is targeted at helping “eligible individuals and families obtain an affordable loan to purchase a home.”
As part of the new rollout, the bank said the program will use “credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments,” and will not require “mortgage insurance or minimum credit score.”
“Individual eligibility is based on income and home location. Prospective buyers must complete a homebuyer certification course provided by select Bank of America and [Department of Housing and Urban Development] HUD-approved housing counseling partners prior to application,” the bank said.
The bank said the new effort will operate as a Special Purpose Credit Program. According to the Federal Deposit Insurance Corporation, creditors can establish the programs under Equal Credit Opportunity Act to “meet the credit needs of specified classes of persons.”
The announcement follows years of data documenting glaring disparities in the housing market.
Earlier this year, a report released by the National Association of Realtors found the homeownership rate for Black Americans in 2020 was lower than it was a decade before, even as the nation’s overall homeownership rate saw a record annual increase.
Data from the Urban Institute also shows troubling racial differences in mortgage denial rates, with Black and Latino households bearing the brunt of the burden. According to the think tank, nearly a fourth of Black homebuyers were denied mortgages in 2020, along with 18 percent of Latino households.
In a statement accompanying the bank’s recent announcement, AJ Barkley, head of neighborhood and community lending for the bank, discussed how homeownership, which advocates have described as a critical tool used to build wealth in America, can strengthen communities.
“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,” Barkley said.
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