Could Bank of America’s Zero-Down Mortgage Program Boost Homeownership in Dallas’ Historically Black And Hispanic Neighborhoods?

Dallas could be making some headway toward its goal of providing mixed-income housing throughout the city thanks to a program from Bank of America.

The program, which offers no down payment home loans for first-time homebuyers in Black and Hispanic neighborhoods, is one of the first of its kind. 

Such initiatives were identified in the Dallas City Council’s recently adopted Racial Equity Plan and the fluid Comprehensive Housing Policy, for which city leaders are hosting a public workshop on Oct. 22. 

A Bank of America representative who handles media inquiries regarding mortgages told CandysDirt.com that the program is available to persons of any race seeking to buy homes in Black/African-American or Hispanic/Latino communities, as defined by the U.S. Census Bureau.

Through the program, Bank of America will make a down payment on behalf of the client – a non-repayable grant of $10,000 in Dallas, she said. These are fixed-rate mortgages, and the customer’s overall monthly payments will be in line with conforming and FHA products with similar loan characteristics.

The Bank of America program, launched Aug. 30, is currently only being offered in Dallas, Charlotte, Detroit, Los Angeles, and Miami. Within the Dallas area, the program is available for homes in Dallas, Collin, Denton, Ellis, Kaufman, Rockwall, and Hunt counties.

The National Association of Realtors reported in February that homeownership rates are 72 percent for White Americans, 61 percent for Asian Americans, 51 percent for Hispanic Americans, and 44 percent for Black Americans. 

How it Works 

Bank of America’s proposal — billed as “an effort to close the racial homeownership gap — offers no down payment, no mortgage insurance, and no closing costs, according to a news release issued last week. It does not require a minimum credit score, but applicants are checked on their ability to pay rent, phone bills, and utilities in a timely manner.

Loans are awarded based on income and home location. Applicants must take a homebuyer certification course provided by Bank of America and the U.S. Housing and Urban Development.

Those interested in applying for the program are encouraged to call Bank of America at 800-641-8362 to schedule an appointment or submit an online application through BofA’s Real Estate Center. 

Dallas Director of Housing and Neighborhood Revitalization David Noguera said Tuesday he did not have any details on BofA’s plans, including which local neighborhoods would be impacted. 

Noguera did recently address the need for mixed-income housing and partnerships with banks and private partners. 

He said in an August city council meeting that his office wouldn’t necessarily be targeting people of color and guiding them to banks for homeownership opportunities, but rather looking at ways to create more housing in specific communities and ZIP codes.

“We want to make sure that those who have historic ties to communities are given the first opportunity to access these resources,” he said. 

Noguera also told city council members that city resources alone can’t solve the housing crisis. 

“Through partnerships with banks, understanding what their community reinvestment goals are, what their obligations are, we’re going to be looking to leverage,” he said. “If all we have is $1 million for a project or a program, how do we take that $1 million and turn it into $10 million? We’re just getting started, but the big piece of it is the leverage factor.” 

Noguera added that his staff is committed to prioritizing mixed-income housing. 

“We’re looking to drive market-rate housing to areas of high poverty,” he said. “We’re looking to drive lower-income households to high-opportunity areas to achieve mixed-income communities.”

All the Way to the Bank

Home-buying is stressful and expensive, and all the associated fees can add up to almost $50,000 for a $400,000 home, according to Bank of America’s release on the new program. 

“Our community affordable loan solution will help make the dream of sustained homeownership attainable for more Black and Hispanic families, and it is part of our broader commitment to the communities that we serve,” said AJ Barkley, head of neighborhood and community lending at Bank of America.

Bank officials have acknowledged that while the zero-down option can lower the barrier to entry for homeownership, the home loan will cover the entire value of the property “and your monthly payments can be higher than they’d be if you paid a little more upfront.”