BofA pledges $5 billion for its affordable housing program
Bank of America pledged to commit $5 billion over the next five years to its program aimed at homebuyers with low to moderate incomes and multicultural households.
The plan includes as much as $10,000 of assistance for down payments and one-off closing costs, as well as grants of as much as $7,500 for one-time costs such as title insurance and recording fees that don't need to be repaid, Bank of America said in a statement Tuesday.
"Down payment continues to be the main issue in achieving homeownership,'' said D. Steve Boland, head of consumer lending at Bank of America. "There are a lot of creditworthy clients that are able to meet their monthly obligations," and their biggest challenge is having the discretionary income to save up for large one-time costs, he said.
The assistance program doesn't reflect a reduction in credit standards because borrowers still have to meet debt-to-income metrics and other requirements, Boland said. The program also includes financial-education tools, partnerships with real estate firms and links with nonprofits that provide homebuyer education and counseling, the bank said.
U.S. lawmakers are turning their attention to housing this month. The House Financial Services Committee is holding meetings on the Fair Housing Act, the affordable housing crisis in rural America and the Community Reinvestment Act, according to a statement.
The committee will also hold an April 10 hearing with the chiefs of the biggest U.S. banks, "Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 Years After the Financial Crisis," chaired by Rep. Maxine Waters, the California Democrat.
The Bank of America program also includes fixed-rate mortgages with down payments as low as 3 percent. Half of the company's mortgages go to low- to moderate-income or multicultural families, and a third of its branches are in areas serving these groups, according to the lender's statement.