Bank of America launches affordable community lending solution


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Bank of America is launching a new mortgage product that would allow first-time home buyers to buy a home with no down payment, no mortgage insurance and no closing costs.

In an effort to close the racial gap in homeownership, the affordable community lending solution will launch in predominantly Black and Hispanic neighborhood markets, including Charlotte, Dallas, Detroit, Los Angeles and Miami, and could later extend to other cities. It will not require a minimum credit score and will instead consider other eligibility factors.

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Is Bank of America’s New Zero Down Mortgage Worth It?

Buying a home is a notoriously expensive process and has become even more expensive as property values ​​have increased over the years. If you consider a modest 5% down payment, lender fees, which can cost you up to 1% of the home’s value, and closing costs, which can be up to 6% of the loan’s value, buyers can pay close to $46,800 up front. for a $400,000 home – this still excludes other fees like underwriting fees, title check, home inspection and appraisal fees.

Offering a loan that doesn’t require a down payment, mortgage insurance, or closing costs could lower the barrier to homeownership. And when you spend less money on down payments and closing costs, you can set aside more of your savings to pay for serious home repairs that need to be taken care of or emergency expenses that may arise right away. that you are moving in.

Just keep in mind, though, that making no down payment means your home loan will cover the full value of the property, and your monthly payments may be higher than they would be if you paid a little up front. You’ll need to work with a financial planner or mortgage lender to make sure the monthly payments fit your budget.

Who will be eligible?

While the program’s goal is to bring black and Hispanic borrowers closer to homeownership, people of all races can qualify for the Community Affordable Loan Solution.

Eligibility will be based on income and property location. It will also use credit guidelines based on factors such as timely rent, utility bill, phone and car insurance payments to determine creditworthiness, although there is no minimum credit score requirement.

If you wish to apply for a loan under this program, you must also complete a homebuyer certification course provided by select Bank of America and HUD approved housing counseling partners. before submit your loan application.

“Our affordable community loan solution will help make the dream of sustainable homeownership accessible to more Black and Hispanic families, and it’s part of our broader commitment to the communities we serve,” AJ Barkley , head of neighborhood and community lending at Bank of America, said in a statement.

Other low down payment options to consider

Navy Federal Credit Union offers a VA home loan option that does not require a down payment and is intended for current or retired members of the armed forces who have registered to become a member of the Navy Federal Credit Union (immediate family members are also eligible).

This lender also offers another option called the Military Choice mortgage, which has similar guidelines to the VA loan, such as no PMI and a 0% minimum down payment, but allows sellers to contribute up to 6% of the value of the house at closing costs.

Federal Naval Credit Union

  • Annual Percentage Rate (APR)

    Ask online for personalized rates

  • Types of loans

    Conventional Loans, VA Loans, Military Choice Loans, Homebuyers Choice Loans, Adjustable Rate Mortgage

  • Terms

  • Credit needed

    Not disclosed but lender is flexible

  • Minimum deposit

    0%; 5% for the conventional loan option

Advantages

  • 0% down payment for most loan options
  • flexible repayment terms ranging from 10 years to 30 years
  • Offers refinancing, second home financing and investment property loans
  • No PMI required
  • Quick pre-approval
  • The RealtyPlus program allows applicants to receive up to $9,000 in cash back

The inconvenients

  • Must be a member of the Navy Federal Credit Union to apply

Chase Bank offers down payment options as low as 3% if you apply for the DreaMaker home loan. The DreaMaker loan is specially designed for those who can only afford a small down payment, but it also comes with stricter income requirements. Eligible borrowers must not have an income above 80% of the region’s median income.

hunting bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, DreaMaker℠ Loans, and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a DreaMaker℠ loan

Advantages

  • The Chase DreaMaker℠ loan allows for a down payment of just under 3%
  • Discounts for existing customers
  • Online support available
  • A number of resources available to first-time home buyers, including mortgage calculators, affordability calculator, training courses and home consultants

The inconvenients

  • Does not offer USDA loans or HELOCs
  • Existing customer discounts apply to those with large balances in their Chase deposit and investment accounts

PNC Bank also has a few specialist lending options to consider. It offers a special loan option aimed at healthcare professionals looking to purchase a primary residence only. With this loan, healthcare professionals can apply for up to $1 million and won’t have to pay for private mortgage insurance, regardless of their down payment.

PNC Bank also offers a USDA loan option, which generally does not require a down payment. However, homebuyers interested in a USDA loan must use the loan to finance a property located in an eligible rural area.

NCP Bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, USDA Loans, Jumbo Loans, HELOCs, Community Loan, and Medical Professional Loan

  • Terms

  • Credit needed

  • Minimum deposit

    0% if you continue with a USDA loan

Advantages

  • Offers a wide variety of loans to meet a range of client needs
  • Available in all 50 states
  • Online and in-person service available
  • Pre-approval in as little as 30 minutes

The inconvenients

  • Does not offer home improvement loans

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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