Bank of America announced its Community Affordable Loan Solution, as a new Special Purpose Credit Program that introduces zero down payment, zero closing cost mortgage solution for first-time homebuyers.
This program will be available in 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 program uses credit guidelines based on timely rent, utility bill, phone and auto insurance payments. It requires no mortgage insurance or minimum credit score.
Eligibility is based on income and home location. Prospective buyers must a complete a certification course provided by select Bank of America and HUD-approved housing counseling partners prior to application.
Bank of America’s new program compliments its existing $15 billion Community Homeownership Commitment, which offers affordable mortgages and grants to 60,000 individuals and families to purchase affordable homes by 2025.
The bank has already helped more than 36,000 people, provided more than $9.5 billion low down payment loans and more than $350 million in non-repayable down payment or closing-cost grants.
A recent Lending Tree report found the share of Black homebuyers who have their mortgage requests denied is notably higher than the share of the overall population who sees the same.
According to the report, the mortgage denial rate for Black homebuyers across the nation’s 50 largest metropolitan areas is an average of 9 percentage points higher than the denial rate for the overall mortgage borrower population. In other words, this means the denial rate for Black borrowers is double the denial rate for the overall borrower population.
On average, 18% of Black homebuyers are denied a mortgage. Denial rates for black borrowers are highest in Detroit, Miami and Jacksonville. The average denial rate for Black borrowers is 25.52% — more than double the average denial rate of 12.55% across San Francisco, Seattle and Sacramento. Though they can vary by metro, denial rates for Black borrowers are higher than 10% in each of the nation’s 50 largest metros.