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by Maurie Backman | Published on Sept. 8, 2022
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Buying a home can be a challenge for many reasons — and not just when the market lacks inventory, which has been the case since the latter part of 2020. Often, people struggle to buy because while they can afford monthly mortgage payments (which are often comparable to or sometimes lower than rent payments), they don’t have adequate funds for a down payment.
Now there are certain mortgage programs that allow buyers to finance a home without putting any money down. The VA loan program, for example, lets buyers purchase a home without a down payment, but eligibility for that program hinges on being a member of the military (or a former member or spouse of a former member).
But now, one lender is launching a new program aimed to make homeownership more attainable for a wider range of borrowers. And if more follow suit, it could help more minorities and underrepresented people take that important step.
Bank of America is moving forward with a $0 down payment mortgage program called the Community Affordable Loan Solution. Not only will buyers be able to move forward with no money down, but they also won’t face closing costs on their mortgages.
The Community Affordable Loan Solution will be available in certain cities — Charlotte, Dallas, Los Angeles, Miami, and Detroit. And it’s meant to target Black and/or Hispanic and Latino communities in those cities. Eligibility for a $0 down payment mortgage will hinge on factors like income and location. Unlike conventional mortgages, there won’t be a minimum credit score requirement to qualify.
Plus, mortgage insurance won’t be required. That’s a good thing, as that can be an added ongoing expense for homeowners.

Although Bank of America’s new loan program won’t have a minimum credit score requirement, applicants will have to show a history of timely bill payments, including rent, utility bills, and insurance bills. Furthermore, while the program will target neighborhoods with minorities, applicants do not have to be Black or Hispanic/Latino to qualify for a $0 down payment loan. Applicants must also complete a homebuyer certification course.
The National Association of Realtors found earlier this year that the homeownership rate among Black Americans is almost 30 percentage points lower than it is among white Americans. The hope is that by opening up the option for $0 down payment loans, it will help people of color and minorities break through the barriers that have previously prevented them from buying homes.
Although it’s more than possible to fare well financially as a renter, homeownership has long been said to lend to financial stability. And so the fact that more people are getting a chance to buy homes is a very positive thing.
Those who own homes have the option to tap the equity they build in those properties. That’s money that can be used in a pinch to avoid costly debt — an option renters don’t get to take advantage of, even if they’ve always done a good job of paying on time.

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Maurie Backman writes about current events affecting small businesses for The Ascent and The Motley Fool.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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