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BofA pledges US$5b for affordable housing in 5-year effort
[NEW YORK] Bank of America Corp pledged to commit US$5 billion over the next five years to its program aimed at home buyers with low to moderate incomes and multicultural households, the lender said in a statement.
The plan includes as much as US$10,000 of assistance for down payments and one-off closing costs, as well as grants of as much as US$7,500 for one-time costs such as title insurance and recording fees that don't need to be repaid.
"Down payment continues to be the main issue in achieving homeownership,'' said Steve Boland, head of consumer lending at Bank of America. "There are a lot of creditworthy clients that are able to meet their monthly obligations," and their biggest challenge is having the discretionary income to save up for large one-time costs, he said.The assistance programme doesn't reflect a reduction in credit standards because borrowers still have to meet debt-to-income, credit metrics, Mr Boland said.
The programme also includes financial education tools, partnerships with real estate firms and links with nonprofits that provide home buyer education and counselling, the bank said.
US lawmakers are turning their attention to housing this month.
The House Financial Services Committee is holding meetings on the Fair Housing Act, the affordable housing crisis in rural America and the Community Reinvestment Act, according to a statement.
The committee will also hold an April 10 hearing with the chiefs of the biggest US banks entitled "Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis," chaired by Representative Maxine Waters, the California Democrat.
The program also includes fixed-rate mortgages with down payments as low as 3 per cent. Half of Bank of America's mortgage loans go to low- to moderate-income or multicultural families, and a third of its branches are in areas serving these groups, according to the statement.