Bank of America’s recent Community Homeownership Commitment™, first introduced in April, has received positive feedback for its impact on first-time homebuyers, an audience which is increasingly comprised of Latinx consumers.
“More than 60% of U.S. Hispanics are millennials or younger, meaning they are just now aging into financial services experiences and major purchases such as homeownership,” explained 2019 NAHREP President David Acosta. Home purchases in the last decade have reflected this demographic shift, with Latinxs accounting for 63% of net U.S. homeownership growth between 2008 and 2018.
The Community Homeownership Commitment was inspired by the challenge that the upfront costs of homeownership can pose to prospective buyers, especially first time buyers. While many people can afford a monthly mortgage payment, Bank of America’s Homebuyer Insights Report reported that 69% of prospective homeowners say saving enough money for a down payment and closing costs is the biggest barrier to homeownership.
The recent Commitment encompasses four highlighted programs, including the new Payment Grant program.
Available products and resources
- The new Down Payment Grant program gives eligible homebuyers in select areas 3% of the home purchase price (up to $10,000) to be used for a down payment, no repayment necessary.
- The America’s Home Grant® 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.
- The Affordable Loan Solution® mortgage, a fixed-rate loan for low- to moderate-income borrowers, offers a competitive rate with a down payment as low as 3% and no mortgage insurance.
- The Freddie Mac Home Possible® mortgage is a fixed-rate loan with a down payment as low as 3% and lower-cost mortgage insurance.
Hispanics have a large appetite for homeownership, and some young prospective homebuyers may find themselves eligible for the program, boosting an already-thriving market audience. “[The Latinx appetite for homeownership] is particularly evident where affordability has driven growth in less traditional markets including Nashville, Atlanta, Oklahoma City and other locations across the Southeast and Midwest,” said 2019 President Acosta.