The initiative, called the Community Affordable Loan Solution, seeks to provide eligible individuals and families with mortgages that can help them get affordable loans to ultimately buy a home, Bank of America said.
The mortgages will first roll out in Charlotte, Dallas, Detroit, Los Angeles, and Miami neighborhoods, per NBC News.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” said AJ Barkley, the head of neighborhood and community lending for the bank. “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.”
Eligibility for the Community Affordable Loan Solution will be based on factors like timely rent, utility, phone, and auto insurance payments — no minimum credit score will be required.
The loans will also not require mortgage insurance, which is usually an added fee for buyers who put down less than 20 percent of the purchase price.
Before applying for the new program, first-time buyers will need to complete a homebuyer certification course provided by the bank and federally approved housing counseling partners, the company said.
The initiative comes as the racial gap in U.S. homeownership remains substantial.
According to the National Association of Realtors (NAR), the homeownership rate for white households in 2020 was 72 percent. For Hispanic and Black households, the rate stood at about 51 percent and 43 percent, respectively.
The Black homeownership rate also fell lower in 2020 than in 2010, in part due to the pandemic, the NAR said.
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