The news: This week, Bank of America announced a new mortgage lending program, the Community Affordable Loan Solution, aimed at making home ownership more attainable for Black and Hispanic families. But the program is receiving mixed reviews from those communities, per MarketWatch.
What does it do? The program requires zero down payment and zero closing costs for first-time homebuyers in Charlotte, Dallas, Detroit, Los Angeles, and Miami.
Mind the gap: Though anyone can apply, the program is an effort to level the playing field for Black Americans and other minority groups that typically face difficulties in obtaining a mortgage and buying and selling their homes.
Reports have also surfaced that Black homeowners receive unreasonably low appraisals on their homes when trying to sell them, and are often offered unfavorable loan terms when applying for mortgages. This puts them at a disadvantage at all stages of home ownership.
Mixed reviews: Bank of America’s program has met with mixed reactions from people in Black communities.
Our take: The homeownership gap must be addressed, as homeownership is one of the primary ways that families can build generational wealth. But programs like this are likely to be both praised and criticized. They’ll be closely scrutinized and analyzed by justifiably wary minority groups keen to determine whether the products and services they’re being offered are truly beneficial or predatory.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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