Why Bank of America’s new mortgage program is good — but not great
If closing the racial homeownership gap were as simple as offering things like zero down payment mortgages, it would have happened already.
Bank of America recently announced a new pilot mortgage program, Community Affordable Loan Solution, that will require no down payment, mortgage insurance or closing costs and will accept other ways of qualifying for mortgages beyond credit scores. While it’s for anyone who qualifies, regardless of race, the program is launching in predominantly Black and Hispanic zip codes and can be seen as an effort to close the racial homeownership gap.
For now, it will be available in Charlotte, Dallas, Detroit, Los Angeles and Miami.
This isn’t the first time national lenders have announced initiatives like this. And while the program will undoubtedly help some borrowers who qualify, America will not close its racial homeownership gap by tweaking mortgage product offerings. If it were that simple, we would have closed it by now. Instead, the homeownership gap between Black and white households is just as wide today as it was when the Fair Housing Act became law in 1968.
Bank of America offers a helpful option, but what good is a mortgage product if the homebuying system is set up in a way that makes it hard for people who need this kind of program to access it?
Bank of America offers a helpful option, but what good is a mortgage product if the homebuying system is set up in a way that makes it hard for people who need this kind of program to access it?
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