Some mortgage lenders have expanded their home loan programs to make it easier for people in low-income 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 through grants, lender credits, and loans with no down payment requirement.
An industry report shows that Black, Asian, and Hispanic Americans are behind white Americans when it comes to homeownership rates.
Certain mortgage lenders have expanded accessibility to homeownership for minority communities.
Those who qualify with participating lenders could get help in the form of 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, particularly Black Americans.
In particular, the report lists the following homeownership rates by race and ethnic group in 2020:
The report also highlights some of the different challenges people of color have getting approved for mortgage loans compared to white consumers.
Mortgage Lenders Working to Make Homeownership More Affordable
Some of the obstacles to homeownership facing people in low-income and minority communities include difficulty saving enough for a down payment and closing costs.
As a result, some home lenders have expanded or created new programs to provide assistance with these challenges. Just a few examples include:
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 a population of more than 50% Black and Hispanic Americans may be able to 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 for Black and Hispanic communities. Eligible homebuyers in participating markets can also enjoy a lender credit of $5,000, which they can use for a down payment or closing costs without needing to repay it.
Chase: In February 2021, Chase announced an expansion of its Enhanced Homebuyer Grant program, providing $5,000 to eligible homebuyers in more than 6,700 communities that are majority Black. The grant, which doesn’t 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 education course and get a DreaMaker home loan through Chase.
These are just a few examples of steps home lenders have taken to address the racial gap in homeownership. Prospective homebuyers should research several lenders, both local and national, to learn more about affordable home loan options.