Bank of America No Down Payment Minority Loan Program

A look at the recently announced Bank of America no down payment loan program for buying homes in predominantly minority areas. This is a new loan program that only applies in certain markets and neighborhoods where most residents are black and hispanic. Bank of America has been criticized for having a lower approval percentage for black and hispanic buyers as well as refinances.

We will discuss elements of the no down payment loan program as featured in Bloomberg and also how this might pertain to fair housing, steering and redlining. Redlining is a process of not allowing home loan in certain areas. Steering is where people are incentivized or steered to an area that is made up predominantly of certain racial groups.

Bank of America’s new no down payment loan program could possibly be challenged because it limits the choice of buyers into a neighborhood that is made up of the same ethnicity as the borrower. The program also covers closing costs as well as the down payment.

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