Bank of America has announced it will triple its affordable homeownership initiative to $15 billion through 2025, in an effort to help more than 60,000 individuals and families to purchase homes.
First launched in 2019 as a $5 billion initiative, the Bank of America Community Homeownership Commitment assists low- and moderate-income homebuyers across the country begin to build their personal wealth and family legacy through the power of homeownership.
The company has so far helped nearly 21,000 individuals and families purchase a home through affordable loans and over $180 million in down payment and closing cost grants.
“Homeownership is an incredibly powerful force, helping families to build wealth over time and strengthening our communities,” said Bank of America President of Retail D. Steve Boland in a press release. “It can be challenging to save enough to buy a home, so it’s no surprise that we’ve seen an overwhelmingly positive response to our programs. We are excited about our goal of helping an even greater number of homebuyers to prepare for homeownership now and in the future.”
Bank of America’s Community Homeownership Commitment focuses on helping put people on the path to affordable homeownership through a combination of specially-designed products, resources and expertise. The program includes two proprietary homebuyer grant programs to help prospective buyers with the upfront costs of homeownership:
- Down Payment Grant program – this program helps customers overcome the biggest barrier to homeownership – down payment. In more than 260 cities and counties across the country, eligible buyers can receive 3% of the home’s purchase price up to $10,000, whichever is less, to be used toward their down payment. No repayment is required.
- America’s Home Grant program – this program offers a lender credit of up to $7,500 that can be used towards non-recurring closing costs, like title insurance and recording fees, or to permanently buy down the interest rate. The funds do not require repayment and can be combined with Down Payment Grant funds to lower the cost of homeownership.
When the grant programs are used together, homebuyers receive on average of about $14,000 to help with their home purchases, according to the company. The grant programs are often used in combination with low down payment mortgages to significantly reduce the upfront funds required to purchase a home.
Low down payment loans are competitive, fixed-rate mortgages with down payments as low as 3%, requiring lower-cost – or even no – mortgage insurance. Nearly 85% of these loans go to first-time homebuyers.
The $15 billion commitment complements Bank of America’s $1 billion, four-year commitment to help advance racial equality and economic opportunity. The work focuses on closing the racial wealth gap in Black and Hispanic-Latino communities with a focus on affordable housing, health and healthcare, jobs/reskilling and small business.
Through the Community Homeownership Commitment, Bank of America said it is addressing two of the biggest barriers to homeownership — down payments and closing costs — which will increase access to homeownership for thousands who have historically not been able to own a home.