Bank of America said that in specific mostly Black and Hispanic communities in five American cities, down payments on loans will not be necessary.
According to Bloomberg, the new Bank of America initiative “aims to assist first-time homeowners in Black and Hispanic areas by offering mortgages that don’t need down payments, closing expenses, or minimum credit scores.” Additionally, the loans won’t need mortgage insurance.
In five American cities—Detroit, Miami, Los Angeles, Dallas, and Charlotte, North Carolina—the experimental program is being implemented “in specific Black/African American and/or Hispanic-Latino communities.”
The “Community Affordable Loan Solution” initiative will use a variety of other criteria, such as a borrower’s history of on-time rent or utility bill payments, to establish eligibility rather than just a borrower’s credit score.
“Our Community Affordable Loan Solution will contribute to making the vision of sustainable homeownership possible for more Hispanic and Black households, and it is part of our larger dedication to the neighborhoods that we serve,” said AJ Barkley, the bank’s head of neighborhood and community financing.
The Bank of America reportedly “wouldn’t divulge the anticipated scale of the initiative, which may be expanded later to other locations,” according to Bloomberg.
In addition, the site noted that “Under the BofA scheme, the lender is paying homebuyers down-payment subsidies of $10,000 to $15,000 so they have instant equity in their houses.”
The “Small Company Down Payment Grant Program,” which Bank of America just unveiled, was designed to “create generational wealth prospects for women and minority business owners” and “provide credit to historically disadvantaged small business borrowers.”