The dream of homeownership may be closer for many members of the Black and Latino communities in the United States. Bank of America has just announced a program that will offer mortgage loans with zero down payment and closing costs to members of these communities who wish to buy their first home.
The program will initially be available in select neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami.
“Achieving homeownership strengthens our communities and can help individuals and families build wealth over time,” said AJ Barkley, head of community lending at Bank of America, in a statement to NBC News.
The loans will not require mortgage insurance – the additional fee typically charged to buyers who put down less than 20% of the purchase price – and there will be no minimum credit score. Instead, eligibility will be based on factors such as rental payments, auto insurance payments, and timely utility bills. Potential buyers will also need to complete a homebuyer certification course provided by Bank of America and federally approved partners before applying for the loan program.
The gap between the number of white, Black, and Hispanic homeowners in the country remains substantial. In 2020, the most recent year for which the National Association of Realtors (NAR) has data, 72.1% of white families were homeowners, while 51.1% of Hispanic families and 43.4% of Black families were in this situation.
“During the pandemic caused by Covid-19, the rise in home prices and low housing supply disproportionately impacted Black families more than any other race/ethnic group,” said the NAR in a report. “White families now have 40% more chances of buying a home compared to Black families,” the association added.