BofA Debuts Minority Homebuyer Program in 5 Cities

Bank of America has launched what it calls an affordable loan solution geared towards Black and Latino first-time homebuyers.

According to a Tuesday (Aug. 30) news release, the zero down payment, zero closing cost program will be available in “designated markets, including certain Black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami.”

“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” said AJ Barkley, the bank’s head of neighborhood and community lending. “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.”

According to the release, the program uses credit guidelines based on factors like timely payments on rent, utility bills, phone, and auto insurance, but no mortgage insurance or minimum credit score.

Eligibility is based on income and home location, Bank of America said, noting that prospective buyers need to complete a homebuyer certification course before applying.

Read more: Federal Regulators Propose New Low-Income Lending Rules

The release points to the massive gap in homeownership between white and Black Americans — 30 percentage points – and white and Hispanic buyers — almost 20 points. This is happening at a time when a competitive housing market has made it tough for anyone to find a new home, especially people of color.

PYMNTS reported in May that U.S. regulators were overhauling the 1977 Community Reinvestment Act to make sure lending is more evenly distributed to lower-income consumers and small businesses.

The act was written to put an end to “redlining,” a practice by banks of avoiding lending in certain areas, often lower-income areas. The revamped rules were designed to make it easier for banks to understand what the regulations require of them.