Bank of America Corporation (BofA), the second largest banking institution in the United States, said it is ready to commit up to $5 billion to help boost homeownership for "low- to moderate-income and multicultural homebuyers and communities."
It will lend out this massive sum over the next five years as part of its "Bank of America Neighborhood Solutions program," which will launch in the second quarter. BofA said the program is now available in 39 markets and will soon roll out nationwide.
The bank estimates the program "will help more than 20,000 individuals and families thrive through the power of homeownership." BofA will roll-out a wide range of new loan programs and options, including grants of as much as $10,000 to help a borrower close a loan.
"We know many of our clients want the power to own their first home, which can sometimes be challenging," said D. Steve Boland, the bank's consumer lending head. The new programs will "aid them in overcoming barriers and put sustainable homeownership within reach."
One of the new options in the Neighborhood Solutions program will see BofA giving eligible borrowers as much as $10,000 they can be used toward their down payment or closing costs when they get a Freddie Mac Home Possible mortgage.
BofA is also expanding its "America's Home Grant program" that will offer a lender credit of up to $7,500 he can use towards non-recurring closing costs (title insurance and recording fees) or to permanently buy down a borrower's interest rate.
BofA said the funds do not require repayment.
The Neighborhood Solutions program will also give borrowers access to down payment and cost savings programs offered by state and local agencies, nonprofits, and employers.
Apart from the Neighborhood Solutions program, BofA also offers the "Affordable Loan Solution mortgage," a fixed-rate loan for low- and moderate-income borrowers that features a competitive rate with a down payment as low as 3 percent and no mortgage insurance. BofA says 90% of these loans are for first-time homebuyers.
Boland said the bank's commitment to affordable and responsible homeownership is greater than ever, with half of our loans going to low- to moderate-income or multicultural families and communities.
"We know many of our clients want the power to own their first home, which can sometimes be challenging. One of the ways we're helping is through our suite of affordable homeownership solutions and professional resources, which aid them in overcoming barriers and put sustainable homeownership within reach."
