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Banks develop programs to improve access to homeownership

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Banks are beginning to make an effort to increase homeownership among people of color.

Homeownership rates among people of color are nearly 30 percent lower than among white families.

Bank of America has a new loan program for first-time homebuyers that requires no down payment, no closing costs and no minimum credit score.

“Down payments typically come from intergenerational wealth, and you need good credit or to build credit,” said Miriam Axel-Lute, CEO/Editor-in-Chief of Shelterforce. “So our country's legacy of segregation and discrimination means there's a persistent racial gap in those things, so changing the rules of the game to make it more fair on the underwriting side is exactly the kind of structural changes that will help.”

Those who lived through the last housing crisis might get nervous at the sound of zero-down mortgages. This program requires both homebuyer education and counseling.

“Back in, say, 2005 or 2007, lenders really didn't pay attention to whether you could actually afford to repay the loan, especially a few years down the line,” said Holden Lewis, a mortgage and housing expert with NerdWallet. “There was this phrase ‘fog of mirror loans,’ you know, like if you were alive, someone could hold a mirror up to your mouth, and it would fog. Then they would give you the loan. Well, that's not the case nowadays. “

For now, Bank of America’s community affordable loan solution is only available in majority Black and Hispanic neighborhoods in Miami, Dallas, Charlotte and Los Angeles. Citi is also expanding its "Homerun" program which has similar goals. It has a slightly higher down payment, up to 3 percent in some cases.