Mortgage lenders expand loan programs for minorities
Some mortgage lenders have expanded their home loan programs to make it easier for low-income people and minority communities to become homeowners.
Earlier this year, a report by the National Association of Realtors highlighted a disparity in homeownership between white consumers and people of color. Lenders like Bank of America, TD Bank, and Chase are working to help bridge the gap with grants, lender credits, and loans with no down payment required.
- An industry report shows that Black, Asian and Hispanic Americans trail white Americans in homeownership rates.
- Some mortgage lenders have expanded home ownership for minority communities.
- Those who qualify with participating lenders could get help in the form of a no down payment requirement, a lender credit, or a grant program.
National Association of Realtors shows racial gap in homeownership
In March 2022, the National Association of Realtors released a report highlighting how homeownership rates can vary widely between white Americans and Americans of color, especially black Americans.
In particular, the report lists the following homeownership rates by race and ethnic group in 2020:
|Race/Ethnic Group||Home ownership rate|
The report also highlights some of the different challenges people of color face getting mortgage approvals compared to white consumers.
Mortgage lenders scramble to make homeownership more affordable
Some of the barriers to homeownership faced by members of low-income and minority communities include the difficulty of saving enough for a down payment and closing costs.
As a result, some home lenders have expanded or created new programs to help address these challenges. Here are some examples :
- Bank of America: In August, the bank launched a trial program of its Community Affordable Loan Solution program in Charlotte, Dallas, Detroit, Los Angeles and Miami. Eligible homebuyers in areas with more than 50% Black and Hispanic Americans can get a home loan with no down payment, no closing costs, no mortgage insurance and no minimum credit score.
- TD Bank: The bank announced its TD Home Access mortgage program in March, offering more flexibility to black and Hispanic communities. Eligible homebuyers in participating markets are also eligible for a $5,000 lender credit, which they can use for a down payment or closing costs without having to pay it back.
- Hunt: In February 2021, Chase announced an expansion of its Enhanced Homebuyer Grant program, offering $5,000 to eligible homebuyers in more than 6,700 majority-black communities. The grant, which does not need to be repaid, can be used for a down payment or closing costs, and homebuyers can also qualify for an additional $500 if they complete a certified training course and obtain a DreaMaker home loan through Chase.
These are just a few examples of the steps home lenders have taken to close the racial gap in homeownership. Potential buyers should research several lenders, local and national, to learn about affordable home loan options.