Bank of America is dropping down payments for homes in 21 cities
The Future. Bank of America is making it possible for first-time homebuyers from minority communities to bypass the hurdles of qualifying for a home loan. With younger Americans buying homes sight unseen or looking into fractional homeownership to get their slice of the American Dream, BofA may finally put traditional ownership back in the realm of possibility for many people.
Insider reports that Bank of America is breaking down the barriers to owning a home.
- The bank is rolling out the Community Affordable Loan Solution in historically Black and Hispanic neighborhoods in 21 cities across the US, including Charlotte, Dallas, Detroit, LA, and Miami.
- The program allows first-time homebuyers to qualify for a loan without needing to make a down payment, pay closing costs, or have a minimum credit score.
- Instead, the bank will approve loans based on payment history for things like rent, wireless service, and auto-insurance payments.
Prospective buyers will need to complete a homebuyer certification course to apply.
Lending a hand
The loan offering, made possible through the 1974 Equal Credit Opportunity Act, is meant to help increase homeownership in minority communities. This is especially relevant to Black Americans, who historically have had major barriers to qualifying for a loan.
- According to the 2020 Census, the median income for Black Americans is under the overall median income (around $41,500).
- Historically, Black Americans also lack sufficient credit history.
- Mortgage marketplace LendingTree found that Black borrowers are denied twice as much for a loan than “the overall borrower population.”
Meanwhile, housing affordability has dropped to its lowest point in 33 years, which only makes matters worse.