Bank of America tests zero-down mortgage payment for Latino homebuyers 

Bank of America is launching a test program offering mortgages to first-time Latino and Black homeowners with no down payments, closing costs, or minimum credit scores, the bank announced this week. 

The program aims to close the substantial racial gap in homeownership that was reflected in the most recent data from the National Association of Realtors. While homeownership for White households in 2020 was at around 72.1%, Hispanic homeownership was 51.1% and Black homeownership was at 43.4%—lower than it was in 2010. 

The program, called the Community Affordable Loan Solutions, will be available to residents of Hispanic and Black neighborhoods in Miami, Los Angeles, Dallas, Detroit, and Charlotte. However, applicants do not necessarily need to be Hispanic or Black to apply. 

The program has no limits on the number of loans. However, to qualify, properties must be located in census tracts that are more than 50% Hispanic or African American, said the bank. 

"Homeownership strengthens our communities and can help individuals and families to build wealth over time," AJ Barkley, head of neighborhood and community lending for Bank of America, said in a statement. 

"Our Community Affordable Loan Solution will help make the dream of sustained homeownership attainable for more Black and Hispanic families, and it is part of our broader commitment to the communities that we serve," he added. 

To be considered for the program, prospective buyers must also complete a homebuyer certification course given by Bank of America before applying to the program. 

The bank will base loan decisions on the borrower’s history of making timely payments for their rent, utilities, phone bills, and auto insurance.

“We will qualify applicants to confirm they have demonstrated an ability to repay,” Barkley added. “What we don’t want to do with this program is place people in homes they cannot stay in.”