By Arkansas Delta Informer Staff – Sept. 6, 2022 – Charlotte, N.C.-based Bank of America, the nation’s second-largest financial group with assets of nearly $2.3 trillion, recently announced a new zero down payment for Black and Hispanic consumers in key markets across the banking giant’s national footprint.
The Aug. 30 Bank of America announcement comes two months after national reports by Zillow and the National Association of Realtors (NAR) showed that nation’s Black homeownership rate fell well behind the rest of the nation during the COVID-19 pandemic and the recent housing boom that saw average national home values climb to more than $400,000.
The Zillow report here, first released in January and based on analysis of federal Home Mortgage Disclosure Act (HMDA) data, shows that Black homeownership rate during the recent housing boom fell below its early 2000s peak as racial disparities in the mortgage and housing markets widened throughout the early part of the COVID-19 pandemic.
According to Zillow, mortgage denial rate was 84% higher for Black applicants than white applicants in 2020 (the latest year for which data is available), according to HMDA, up from 74% in 2019. Nationwide, 19.8% of Black applicants were denied a mortgage in 2020, the highest among races and much higher than the 10.7% of white applicants who are denied. Black applicants had the highest denial rates in Mississippi (31%), Louisiana (26.1%), Arkansas (26%) and South Carolina (25.8%).
According to the NAR, today there is a nearly 30-percentage-point gap in homeownership between White and Black Americans; for Hispanic buyers, the gap is nearly 20 percent. And the competitive housing market has made it even more difficult for potential homebuyers, especially people of color, to buy homes.
Bank of America’s zero down, zero closing cost mortgage solution for first-time homebuyers will be available in designated markets, including certain Black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The Community Affordable Loan Solution aims to help eligible individuals and families obtain an affordable loan to purchase a home.
The Community Affordable Loan Solution is a Special Purpose Credit Program that uses credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments. It requires no mortgage insurance or minimum credit score. Individual eligibility is based on income and home location. Prospective buyers must complete a homebuyer certification course provided by select Bank of America and HUD-approved housing counseling partners prior to application.
This new program is in addition to and complements Bank of America’s existing $15 billion Community Homeownership Commitment™ to offer affordable mortgages, industry leading grants and educational opportunities to help 60,000 individuals and families purchase affordable homes by 2025. Through this commitment, Bank of America has already helped more than 36,000 people and families become homeowners, having provided more than $9.5 billion in low down payment loans and over $350 million in non-repayable down payment and/or closing cost grants. To date, two-thirds of the loans and grants made through the Community Homeownership Commitment has helped multicultural clients to achieve homeownership.
Bank of America also has a 26-year relationship with the Neighborhood Assistance Corporation of America (NACA), through which the Bank has committed to providing an additional $15 billion in mortgages to low-to-moderate income homebuyers through May 2027.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” said AJ Barkley, head of neighborhood and community lending for Bank of America. “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.”
In addition to expanding access to credit and down payment assistance, Bank of America provides educational resources to help homebuyers navigate the homebuying process, including:
- First-Time Homebuyer Online Edu-Series,™a five-part, easy-to-understand video roadmap for buying and financing a home, available in English and Spanish.
- BetterMoneyHabits.com free financial education content, including videos about managing finances and how to prepare for buying a new home.
- Bank of America Down Payment Center – site to help homebuyers find state and local down payment and closing cost assistance programs in their area. Bank of America participates in more than 1,300 state and local down payment and closing cost assistance programs.
- Bank of America Real Estate Center – site to help homebuyers find properties with flags to identify properties that may qualify for Bank of America grant programs and Community Affordable Loan Solution™.
For more information, contact Bank of America at 1-800-641-8362.
In related news, Bank of America also announced the launch of a Small Business Down Payment Program to drive business growth and help create generational wealth opportunities for minority and women business owners. This special purpose credit program will extend credit to historically disadvantaged small business borrowers and enable them to purchase commercial real estate through grants. The program will launch in select markets — Atlanta, Chicago, Charlotte, Dallas and Los Angeles — with plans to expand in 2023.