BofA expands affordable-housing programme to $15 billion by 2027

Bloomberg

Bank of America Corp (BofA) is expanding a mortgage program for low- to moderate-income homebuyers in an effort to
address racial wealth gaps.
The lender, working with the non-profit Neighbourhood Assistance Corp of America, set a goal of providing $15 billion in mortgages through May 2027, according to an announcement. Buyers get loans with no down payment, at below-market fixed-interest rates, and with closing costs paid by the bank. The program has provided more than 42,000 home loans since its inception in 1996, including 9,100 in the last two years, of which more than 85% are for people of colour.
“Home ownership is one of the means to build wealth and it evens the playing field,” AJ Barkley, a neighbourhood lending executive at Bank of America, said in an interview.
Despite federal reforms in last several decades, gaps between Black and White homeownership haven’t improved. In the second quarter of 2019, Black homeownership hit the lowest rate since the 1970s, at 40.6%. Meanwhile, White homeownership climbed in the beginning of 2019 to 73.1%. The following year ended with slightly higher rates but a similar disparity.
Frances White, a math teacher for gifted students in Portsmouth, Virginia, was turned away by multiple lenders and affordable-housing programs, or put off by unfavourable terms. White, who is African American, was frustrated by her inability to get a loan despite having a Ph.D. and stable employment.
“I just cried, and said, ‘Why can’t this happen for me? I’ve got a good job, I’ve got a good education and I can’t buy a house,’” she said in an interview. White was finally able to purchase a home via the BofA-NACA program in 2019. “You have to hang in there, you can’t give up,” she said.
NACA provides more than 30% of the housing counseling in the US, including homebuyer education classes and financial management.
Its program with BofA aims to eliminate the four biggest barriers to affordable homeownership: significant savings, unaffordable terms, restrictive underwriting, and racism and bias, according to Bruce Marks, NACA chief executive officer.
“It’s setting a standard for the banking industry, that this is what other institutions should be doing,” Marks said.