Still, the spokesperson noted the low rates of homeownership among the targeted borrowers as compared to their more mainstream counterparts helped prompt the program: “Homeownership rates among Black/African Americans and Hispanic-Latinos are nearly 30% and 20% [respectively] lower than their White counterparts, as persistent barriers to homeownership impede opportunities for minority communities to build generational wealth and close the racial wealth gap,” a bank spokesperson told MPA. “This program aims to address the unique challenges and needs that minority homebuyers face, however eligibility is based on income and home location, not race.”
The spokesperson suggested the program may be widened beyond the five initial markets where it’s been introduced: “Our current focus is on these five markets. During the early launch, we will monitor the program to ensure that we are meeting the homeownership needs of the clients and communities we serve; we will assess a broader roll out in the time to come.”
Rather than largely relying on credit score as has been the norm, program eligibility rests on other factors demonstrating financial responsibility, the spokesperson said: “The Community Affordable Loan Solution requires borrowers to demonstrate they have an ability to repay their debt obligations by using credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments,” the spokesperson said. “Completion of a homebuyer certification course provided by a select Bank of America and HUD approved housing counseling partner is also required prior to application.”
Given that the program was launched just over a week ago on Aug. 30, it’s too early to tell how many might benefit from it among the five targeted communities, the spokesperson said. However, a similar program has already benefited tens of thousands of borrowers that may have not otherwise qualified for a loan, the spokesperson said.