Sometimes things sound too good to be true. Could this be one of those things?
This new mortgage is targeting 21 cities where it could make it much cheaper and easier to buy a home. Bank of America aims to help by launching a mortgage that doesn’t require upfront payment and it doesn’t require a minimum credit score but considers factors like rent and insurance payments.
The Community Affordable Loan Solution will be available in appointed markets, including in historically Black and Hispanic neighborhoods located in Charlotte, North Carolina; Dallas; Detroit; Los Angeles; and Miami. The plan requires no mortgage insurance or minimum credit score and instead uses credit guidelines based on factors like rent, utility, phone, and auto-insurance payments. To qualify, borrowers must complete a homebuyer certification course prior to application.
With no downpayment and no credit score requirement, Bank of America is relying on what they call a “Homebuyer Certification Course”. The only difference that appears between 2007-8 and today is the need for the borrower to take a course in responsible homeownership.
Bank of America’s plan to ditch credit scores and instead focus on rental and auto payments could improve approval rates for people of color — and ultimately give them a better shot at the American dream of homeownership.
The neighborhoods being addressed in this new offering from BoA doesn’t seem to be targeting new housing, just resales. Time will tell.
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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