Bank of America has created a program to entice lower-income buyers to fulfill their dreams of purchasing a home. The program called Community Affordable Loan Solution will largely target largely minority neighborhoods where African American and Hispanic families may reside.
Spearheaded in part by AJ Barkley, in the Neighborhood and Community Lending Department at the bank, the program will work in partnership with Housing and Urban Development to provide services such as housing counseling which is required in many states for participants to receive funds from first-time homebuyer programs.
The requirements are widely variable compared to other types of mortgage loans and include the following:
- No miniumum credit score
- Specific neighborhood locations
- No mortgage insurance requirement
- Positive utility payment history
- Favorable rental history
- Zero closing costs
The program aims to increase the level of homeownership for the African American and Hispanic communities as compared to other ethnicities and backgrounds. Research shows that their target demographic is half as likely as their counterparts to own a first or second home.
While some may laud the program as a welcomed reprieve after decades of an unbalanced economy,others are not so quick to jump on board giben the significant risks eminiscient of the housing mortage crises just 15 years ago.
So far Bank of America has placed nearly 40,000 families into homes as a result of their program. However,with the economy knee deep into a recession,rampant layoffs, and an underwater mortgage crisis brewing,the true results of the initiatves success have yet to be determined.