The Bank of America is introducing new zero-down-payment mortgage and no-closing-cost mortgage products to assist people of color in purchasing their first homes. The loans are subject to stringent financing and are based on credit criteria such as direct debits for utilities, insurance, and rent. There is no need for a minimum credit score or mortgage insurance. Eligibility will be determined by the location of the home and revenue.
The initiative of a zero down payment mortgage, which was announced this week, is aimed at first-time homeowners of color in Charlotte, Detroit, Miami, Los Angeles, and Dallas. The zero-down-payment mortgage program was launched to help individuals of color own a house and begin saving and investing.
To be eligible for the bank’s Community Affordable Loan Solution program of zero down payment mortgage, applicants must be black or Hispanic, intent on purchasing a home within one of the major cities mentioned above, and also have completed a homebuyer course authorised by the US Department of Housing and Urban Development. Once they have acquired the loan, applicants need not obtain mortgage insurance.
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Because of wealth disparities and the legacy of historical discrimination, rates of property ownership differ considerably across racial and ethnic backgrounds. According to the National Association of Realtors, approximately 7 in 10 White families own a home, while only 4 in 10 Black households and 5 in 10 Hispanic family units do. Furthermore, Black and Hispanic mortgage applicants were 7% more likely to be denied than white or Asian aspirants, at 4% and 3%, respectively, in accordance with the Realtor’s National Association.