Bank of America offers $10K to lower-income buyers

Bank of America (BofA) announced on Tuesday the rollout of a new $5 billion affordable homeownership initiative that includes downpayment or closing cost help for low- to moderate-income and multicultural homebuyers. The program will launch in the second quarter of this year.

BofA says the program should help more than 20,000 individuals and families over the next five years move toward homeownership.

Bank of America's Neighborhood Solutions program includes a downpayment and closing cost assistance option, as well as low-downpayment mortgages and grants that can be applied to non-recurring closing costs.

BofA says it also plans to form strategic partnerships with real estate professionals and a national network of affordable housing nonprofit partners. The goal is to offer homebuyer education and counseling help to low- to moderate-income and multicultural homebuyers hoping to become homeowners.

Through the bank's new downpayment and closing cost program, the bank will give eligible borrowers up to $10,000 to be used toward their downpayment or closing costs when they get a Freddie Mac Home Possible mortgage.

Eligible borrowers could also qualify for a lender credit up to $7,500 that could be used toward nonrecurring closing costs, such as title insurance and recording fees, or to permanently buy down the interest rate. The funds don't require repayment.

The bank also announced the Affordable Loan Solution mortgage – a fixed-rate loan for low- and moderate-income borrowers with a competitive rate, a downpayment as low as 3 percent and no required mortgage insurance. The majority of these loans go to first-time home buyers, the bank said.