This week, Bank of America unveiled a zero down mortgage option as part of their Community Homeownership Commitment.
In short, they want to help more “modest-income” and first-time home buyers achieve the American Dream of homeownership.
Specifically, they said they’re targeting “certain Black/African American and/or Hispanic-Latino neighborhoods” throughout the country.
To accomplish this goal, they’ve rolled out some enhancements to their existing Affordable Loan Solution.
This includes both closing cost assistance and down payment help, along with more liberal underwriting guidelines, to tackle affordability constraints.
BofA’s Community Affordable Loan Solution
- Combines a 3% down mortgage
- With an up to 3% down payment grant ($10,000 maximum)
- And up to $7,500 in closing cost assistance
- Borrowers can come to the closing table with basically no money
- No minimum credit score or mortgage insurance requried
- Applies to properties in select markets nationwide
- Borrowers must complete homebuyer education
- Property must be owner-occupied
- Must take out a fixed-rate mortgage
- Can be a conventional, FHA, or VA loan
The new loan program is coined the “Community Affordable Loan Solution,” an enhanced version of their 3% down Affordable Loan Solution.
It is in addition to the bank’s $15 billion Community Homeownership Commitment, which is a goal to help 60,000 individuals/families purchase affordable homes by the year 2025.
Thus far, Bank of America has already helped 36,000+ become homeowners, with more than $9.5 billion in low down payment loans and over $350 million in non-repayable down payment and/or closing cost grants.
And two-thirds of these loans and grants have assisted “multicultural clients.”
The bank highlighted a National Association of Realtors (NAR) report that shows there is a near 30-percentage-point gap in homeownership between White and Black Americans, and a near-20 percent gap for Hispanic buyers.
To alleviate that problem, BofA is focusing on designated markets in Charlotte, Dallas, Detroit, Los Angeles and Miami.
In these cities, borrowers will be able to apply for a zero down mortgage with Bank of America and receive closing cost assistance as well.
Additionally, Bank of America will not require a minimum credit score or mortgage insurance, and will factor in…