BankAmerica has increased its commitments to two mortgage products aimed at low-income borrowers, a step toward meeting its $350 billion Community Reinvestment Act pledge.

One product allows borrowers to buy a home with no money down. The other accepts borrowers who do not have credit scores but can prove their creditworthiness through nontraditional means.

The bank raised its commitments from $500 million and $600 million, respectively, to $1 billion for each product.

Last year, a month after the old BankAmerica Corp. and NationsBank Corp. announced their merger plans, they unveiled a $350 billion CRA pledge, the largest such commitment ever. Community groups complained that the banks' plan did not specify how much particular communities would get.

The bank has not specified volume goals for specific cities or neighborhoods. For the mortgage to borrowers lacking credit scores, however, BankAmerica has lowered to $500 the amount those in Arizona, New Mexico, Nevada, and Los Angeles County must contribute to the 3% down payment.

The rest of the down payment can come from a gift, a grant, or another loan. In all other states where this "credit flex" loan is offered, the borrower's minimum contribution is 1% of the loan balance.

The two affordable-housing programs were developed by the old BankAmerica, said Stephanie Smith, national manager of community lending at the merged company, as she was at BankAmerica. The bank is now making those loans available in the old NationsBank's markets, she said.

NationsBank's affordable-lending products were Fannie Mae and Freddie Mac loans that "weren't letting us reach deep enough with our lower-income borrowers," Ms. Smith said. "These two products allow us to make more loans to low-income families and people of color in low-income neighborhoods."

For now, BankAmerica intends to hold all the loans it originates under these programs in its portfolio, though Ms. Smith said the bank expects a secondary market to develop.

Community groups applauded the mortgage initiative, but said they still want the bank to set geographic targets.

"We think it's positive that financial institutions that care about CRA are trying to regain the market from unregulated finance companies and mortgage companies," said Alan Fisher, executive director of the California Reinvestment Committee.

But "we are still concerned that the bank has not made a specific commitment to California," he said.

Activists like Mr. Fisher are also concerned about the dominance of NationsBank management in the new company, and the departure of two key community-development officials from the old BankAmerica, Donald Mullane and Mike Mantle. He said his group wanted the bank to outline its precise goals for California so it "can be held to the same standards."

But Bruce Marks, executive director of the Neighborhood Assistance Corp. of America in Boston, praised Hugh McColl, former CEO of NationsBank and now CEO of BankAmerica, as "the one banker who's absolutely committed to these programs and has gone out and provided leadership to defend CRA and to advocate for low-income lending."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.