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Bank of America to give loans requiring zero down payment, no credit score, to select Black and Hispanic communities

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Members of Black and Hispanic/Latino communities may be eligible to buy homes for zero down payment and zero closing costs thanks to Bank of America. First-time homebuyers in certain areas of Charlotte, Dallas, Detroit and Los Angeles can apply for the new mortgage, called “Community Affordable Loan Solution.”

“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” AJ Barkley, head of neighborhood and community lending for Bank of America, 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.”

The loans will not require mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price. There will also be no minimum credit score. The bank says eligibility will be based on factors like timely rent payments and on-time utility bill, phone and auto insurance payments.

Bank of America will also require applicants to complete a homebuyer certification course it will provide before applying for the loan. A report from the National Association of Realtors (NAR) showed: “During the pandemic, rising home prices and low housing supply have disproportionately impacted Black households more than any other race/ethnic group.”

White households are now 40% more likely to be able to afford to buy a home compared with Black households, the association said. The racial gap in homeownership rates in the U.S. remained substantial in 2020, the most recent year for which National Association of Realtors data are available.

For white households, the homeownership rate was 72.1%. That compares with 51.1% for Hispanic households and 43.4% for Black households. The Black homeownership rate was lower in 2020 than it was in 2010, the NAR said.

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