Bank of America is now offering first-time homebuyers in a select group of cities, including Charlotte, zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic communities.
Bank of America is offering the new option in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgages are known as the “Community Affordable Loan Solution,” with the goal of helping more individuals and families obtain affordable loans.
Tameka Gunn is the Vice President for Community Link. The nonprofit helps people on the path to homeownership through asset-building workshops, credit score improving skills and financial literacy programs. She’s excited to connect her clients to this new initiative.
“Finally a product to help those who have fallen behind in becoming a homeowner,” Gunn said.
A 2021 WCNC Charlotte investigation found that some of the largest lenders denied home loans for Black applicants up to three times more often than white borrowers. Market-wide, the data revealed home loan disparities across every income bracket.
While 73.8% of white Americans own their homes, according to the Census Bureau, the rate drops down to 48.3% for Hispanic and 45.3% for Black households.
“A lot of the challenges that minority groups face when purchasing a home is the fact that they have to have a certain amount of money to put down on the home and then they also have to have those funds for closing costs,” North Carolina realtor Brittney McDonald said. ” There’s a huge disparity when it comes to minorities and home ownership. And that goes back decades, for various reasons.”
This program hopes to change that and close that gap.
“There’s a lot of gentrification that’s going on all over the place and it’s happening a lot here in Charlotte,” McDonald said. “We’re noticing that the Black communities are being pushed out of the city where there were once a lot of Black people living in those communities. So, this is a chance for people to take advantage of this loan program so they can use that money to buy in these areas.”
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” AJ Barkley, head of neighborhood and community lending for Bank of America, said. “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 zero-down loans do not require mortgage insurance, the typical fee charged to buyers who put down less than 20% of the purchase price, and have no minimum credit score. Instead, eligibility will be based on factors like timely rent payments and on-time utility bill, phone and auto insurance payments.
Gunn said this is a step towards building wealth and strengthening minority neighborhoods.
“You need to stay in the home for a certain amount of time so this isn’t for investors that are coming in buying property and selling them off,” Gunn said. “This is to get people into the program, into their homes and so they can stay.”
Bank of America says prospective buyers must also complete a homebuyer certification course to apply for a zero-down loan.
See more at WCNC-Charlotte.
