Bank of America Offering Mortgages With Zero Down Payment, Zero Closing Costs to First-Time Black Homebuyers

Bank of America Offering Mortgages With Zero Down Payment, Zero Closing Costs to First-Time Black Homebuyers

Bank of America (BoA) is now offering Black and Hispanic first-time homebuyers in select cities mortgages with zero down payment and zero closing costs.

NBC News reported that BoA’s Community Affordable Loan Solution (CALS) mortgages will help Black and Hispanic individuals and families acquire an affordable loan to purchase a home. The CALS will be available in certain Charlotte, Dallas, Detroit, Los Angeles, and Miami neighborhoods.

“Homeownership strengthens our communities and can help individuals and families build wealth over time,” AJ Barkley, head of neighborhood and community lending for BoA, said in a release.

“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.”

Due to decades of discriminatory practices in the real estate and banking industries, Black and Hispanic homeownership is significantly lower than white homeownership. Approximately 44.1% of Black Americans own their home and 51.1% of Hispanic Americans own their home. Both numbers pale in comparison to the 72.1% of white Americans who own a home.

In addition to the loans being no money down require no mortgage insurance, which is typically charged to homebuyers who put down less than 20% of the purchase price of the home. The loans will also not require a minimum credit score.

Eligibility requirements for the loans will be based on other factors such as timely payments including rent, utility, phone, and auto insurance payments. Prospective homebuyers will be required to complete a homebuyer certification course provided by BoA and federally approved housing counseling partners before applying for the loan program.

Since the beginning of the COVID-19 pandemic, home values have skyrocketed as people across the country rushed to purchase homes to get more space or move into urban areas. However, Fortune Magazine reported a two-year housing downturn is coming. Goldman Sachs projects sharp declines this year in new home sales (22%), existing home sales (17%), and further declines in new home sales (8%) and existing home sales (14%) in 2023.