The Bank of America has announced a new $5 billion affordable home initiative that aims to assist low- to moderate-income and multicultural buyers with down payments and closing costs.
The BoA says it hopes its Neighborhood Solutions program will help more than 20,000 buyers enter homeownership within the next five years.
The program includes both down payment assistance and closing costs assistance. There’s also “low down payment mortgage” option, plus grants that can be applied to non-recurring closing costs. BoA is also partnering with both real estate agents and a network of affordable housing nonprofits to provide home buyer education and counseling services.
The program will provide eligible borrowers with up to $10,000 for their down payment and closing costs, when they apply for a Freddie Mac Home Possible mortgage.
In addition, borrowers may also qualify for $7,500 in lender credit, which is supposed to be used for non-recurring closing costs such as title insurance and recording fees, or to permanently buy down the interest rate on the mortgage. This credit would not need to be repaid.
BoA is also offering a new Affordable Loan Solution mortgage. This is a “competitive fixed-rate loan” for low- and moderate-income borrowers. The down payment on this loan would be as little as 3%, with no mortgage insurance required. The offering is primarily targeted at first-time buyers, the bank said.
“Our commitment to affordable and responsible homeownership is greater than ever, with half of our loans going to low- to moderate-income or multicultural families and communities,” said D. Steve Boland, head of consumer lending at Bank of America. “One of the ways we’re helping is through our suite of affordable homeownership solutions and professional resources, which aid them in overcoming barriers and put sustainable homeownership within reach.”