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Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other cities

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txwallflower
Established Member

Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other cities

Bank of America Launches Zero-Down Mortgages for Black, Latino Customers – NBC 5 Dallas-Fort Worth (...

 

The Community Affordable Loan Solution will offer home loans with no down payment or closing costs. The program’s credit guidelines are based on factors such as timely rent, utility, phone and auto insurance payments, and it does not require mortgage insurance or a minimum credit score.

It will be available in African-American/Black and Hispanic/Latino communities, as defined by the U.S. Census, in Dallas, Charlotte, N.C., Detroit, Los Angeles and Miami.

Message 1 of 9
8 REPLIES 8
hwwilliams
Valued Member

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci

Isn't this predatory and also one of the reasons the 2008 housing crisis happened?

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Message 2 of 9
K-in-Boston
Credit Mentor

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci


@hwwilliams wrote:

Isn't this predatory and also one of the reasons the 2008 housing crisis happened?


No.  It merely creates opportunity by using other payment histories in lieu of credit scores, as well as negating the need for a down payment or MIP.  Other lending criteria such as the means to pay would still apply.  

 

The issues in 2008 were primarily that there weren't checks and balances on whether people could actually afford to pay, adjustable rate mortgages were rampant, MIP can add a substantial amount to a monthly payment, and people were often pushed into much more house than they could actually afford.

 

If this helps people who would otherwise be lifetime renters get into a home for the same or less than they are paying in rent today, that's an excellent long term outcome for these first-time homebuyers.

Message 3 of 9
Creditplz
Valued Contributor

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci

Where's the application?! My cousin needs to jump on this! 

Message 4 of 9
805orbust
Valued Contributor

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci

That's a great way to summarize it @K-in-Boston.. I raised more than a bit of an eyebrow upon first hearing of it. If deployed as you outlined, it's a great thing. 



Message 5 of 9
txwallflower
Established Member

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci


@Creditplz wrote:

Where's the application?! My cousin needs to jump on this! 


From what I have read the prgram started last week but it's not on BOA's website so your cousin would need to call BOA CS and ask for the mortage dept or can go online and schedule an appointment. Your cousin should be specific in mentioning he/she is interested in the  "Community Affordable Loan Solution" mortgage. What I found in another article is this program is for homes in areas with 50% or more homeowners being Black, Latina, Hispanic. And that any "low income" person, regardless of race, is eligible. 

 

And this is a requirement:

 

The program's homebuyer certification course is designed to demonstrate an applicant's ability to meet current obligations and create a budget roadmap in sustaining their homeownership in the future. 

 

I'm sure this won't be an easy process but best to talk to BOA to see if this is something your cousin may be interested in.  I also read the loan types this mortage includes are: FHA, VA, Conventional.

 

Here is something your cousin may want to think about.

 

https://www.npr.org/2022/09/04/1120855149/bank-of-america-black-and-latino-home-buyers

 

 

 

Message 6 of 9
Civil
Regular Contributor

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci

NACA has the exact program with BOA, I am assuming they are making the process easier and direct and for minorities. Remember BOA was charging minorities higher interest rates with equal or better credit than Caucasian’s and got sued for it. I am assuming they’re trying to give hugs and kisses






Message 7 of 9
MarkintheHV
Frequent Contributor

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci


@K-in-Boston wrote:

The issues in 2008 were primarily that there weren't checks and balances on whether people could actually afford to pay, adjustable rate mortgages were rampant, MIP can add a substantial amount to a monthly payment, and people were often pushed into much more house than they could actually afford.

 

If this helps people who would otherwise be lifetime renters get into a home for the same or less than they are paying in rent today, that's an excellent long term outcome for these first-time homebuyers.


If you need that kind of assistance getting into a home, then you really cannot afford it.  While it is nice to have no closing costs and no down payment, what about taxes, insurance and setting a little aside for repairs?  I wonder how many of these will end up with liens on them because they cannot afford the property taxes, or able to pay for repairs and upkeep.  It is a lot more than renting.

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Message 8 of 9
Revelate
Moderator Emeritus

Re: Bank of America Launches Zero-Down Mortgages for Black, Latino Customers in Dallas (and other ci


@MarkintheHV wrote:

@K-in-Boston wrote:

The issues in 2008 were primarily that there weren't checks and balances on whether people could actually afford to pay, adjustable rate mortgages were rampant, MIP can add a substantial amount to a monthly payment, and people were often pushed into much more house than they could actually afford.

 

If this helps people who would otherwise be lifetime renters get into a home for the same or less than they are paying in rent today, that's an excellent long term outcome for these first-time homebuyers.


If you need that kind of assistance getting into a home, then you really cannot afford it.  While it is nice to have no closing costs and no down payment, what about taxes, insurance and setting a little aside for repairs?  I wonder how many of these will end up with liens on them because they cannot afford the property taxes, or able to pay for repairs and upkeep.  It is a lot more than renting.


Except this is what DTI calculations are for.  

 

I used to work for a deep subprime lender, we did some analysis and it pretty much resoundingly came back that if you gave folks $400 and if they turned around and actually paid their debts, they'd get out of the PDL (pay day loan) space.  It wasn't that much and would have immediately refinanced their debt from nearly 400% to even the 110% ballpark we were charging (we had a first payment default rate of like 33% though some of this was unquestionably fraud) .  This was 15ish years ago so the numbers are different now, but I strongly suspect the broad strokes are the same.

 

You are right and some will default, but it won't be all of them and those that it does help... well, this is the first step to generational wealth and that is utterly righteous compared to some of the suck things that banks in particular have done in the past.

 

Also I'd note NACA is a darned good program overall, their  success rate doesn't suck and if they're involved this could well be winning for many people.




        
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