Bank Of America has announced it’s now offering zero down payment, zero closing cost mortgages for first-time homebuyers in Black and Latino neighborhoods.
According to a statement released by Bank Of America (BOA), the new mortgage is called The Community Affordable Loan Solution. It will be available to first-time homebuyers in Black and Latino homebuyers in select cities. The first cities to partake in The Community Affordable Loan Solution will be Charlotte, Dallas, Detroit, Los Angeles and Miami.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” the head of neighborhood and community lending for Bank of America, AJ Barkley, said in its 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 Community Affordable Loan Solution reportedly aims to assist eligible individuals and families acquire an affordable loan to purchase a home, BOA said. They noted that the loan doesn’t require mortgage insurance or a minimum credit score. As such, eligibility will be based on other factors, including timely rent, utility bill, phone and auto insurance payments. Before applying for the loan program, prospective buyers must also complete a homebuyer certification course provided by Bank of America and HUD-approved housing counseling partners.
In BOA’s statement, the organization additionally mentioned, according to the National Association of Realtors– there’s currently a nearly 30-percentage-point gap in homeownership between white and Black Americans. For Latino buyers, the gap is almost 20 percent, which proves that the competitive housing market has made it challenging for potential minority homebuyers to purchase houses.
An article published by TIME in April explained that the gap in homeownership rates between Black and White Americans grew to over 30% in 2021–higher than in 1960 when racial housing discrimination was legal.