Zero-Down Mortgages? How Big Banks Are Supporting Homeownership

Bank of America just recently revealed a trial program that provides zero-down home loans in minority neighborhoods in particular city locations throughout the nation. This effort signs up with a growing variety of programs from huge banks that look for to narrow the expanding space in between white and minority homeownership.

U.S. homeownership rates skyrocketed throughout the pandemic, however the majority of these gains were not amongst Black or Hispanic purchasers. Historically, white Americans have the greatest rate of homeownership at 72.1%, according to a research study by the National Association of Realtors. Black and Hispanic property owners have the most affordable rates at 43.4% and 51.1% respectively and have actually dealt with prejudiced financing practices.

Hispanic homeownership has actually increased somewhat over a years, however Black homeownership has actually reduced, dropping to 40.9% in 2019 from 42.4% in 1960, according to Census information.

Let’s take a look at programs developed to reduce that distinction and what zero-down home loans provide possible newbie and minority property buyers.

Zero-Down Mortgage Programs Available in Minority Communities

In current years, numerous significant banks have actually been fined or settled claims over unjust and predatory financing practices with minority clients.

Now numerous banks are looking for to resolve racial variations in homeownership through grants, collaborations and other long-lasting financial investments in minority neighborhoods.

Bank of America

Bank of America’s Community Affordable Loan Solution intends to assist newbie property buyers in minority communities by getting rid of barriers to homeownership — like having adequate money for a deposit.

Not just can you get a home mortgage without a deposit, however there are no closing expenses, needed minimum credit history or home mortgage insurance coverage.

Instead, Bank of America will depend on a performance history of on-time payments for lease and energies and have candidates finish a property buyer accreditation course to identify eligibility. Applicants won’t be confirmed based upon race, according to Bank of America.

Using census information, qualified communities will have a bulk African American or Hispanic/Latino population in Charlotte, Dallas, Detroit, Los Angeles and Miami.

Bank of America likewise revealed a grant program in August targeted at supporting disadvantaged small company owners. The program will assist individuals purchase industrial home for their small company endeavors in chance zones in Atlanta, Chicago, Charlotte, Dallas and Los Angeles.


Chase just recently broadened its effort concentrated on supporting potential Black and Hispanic property buyers through a portfolio of grant and help programs.

The property buyer grant puts $5,000 towards a deposit or closing expenses for certified property buyers who buy a house in an underserved or low-income neighborhood.

“Owning a home is a key factor to providing family stability and building generational wealth, but out of reach for far too many people, especially Black, Latino and Hispanic households,” Abigail Suarez, head of community advancement at JPMorgan Chase, stated in a news release.

Wells Fargo

Since 2012, Wells Fargo has actually provided the NeighborhoodLIFT program that supplies possible property owners in particular neighborhoods with approximately $20,000 to utilize towards a deposit or closing expenses.

Some property buyers — such as veterans or service members, instructors, police and emergency situation responders — can get approved for approximately $22,500.

raise loans are interest complimentary and will be forgiven after the customer resides in the house for 5 years and finishes a HUD house education program. Most raise loans are supplied through Wells Fargo Foundation financing in collaboration with regional real estate companies and are just readily available in choose low-income neighborhoods.

Wells Fargo likewise provides a Special Purpose Credit Program that assists minority property owners re-finance their home loans to lower rates and lower refinancing expenses.

Other Programs Available to Minority Homebuyers

There are numerous companies to have a look at if you’re trying to find resources to purchase a house and believe you may get approved for a minority property buyer grant.

  • The National Association of Real Estate Brokers provides advocacy for Black homeownership, grants for deposits or closing expenses, moneying for tasks, small company financing and help with protecting credit as part of its Two Million Black Homeowners effort.
  • The Black Homeownership Collective supplies assistance from over 100 companies and people as they look for to develop 3 million extra Black property owners by 2030.
  • Many cities and states have regional programs that supply comparable grants and help to minority or newbie property buyers in low-income locations. Check with HUD for more resources and info or go to Down Payment Resource to examine your eligibility for different programs.

Are There Risks With Zero-Down Payment Mortgages?

No deposit seems like a sweetie offer, however there are some downsides related to these loans.

  • Home equity: If the real estate market drops, you might wind up “underwater,” owing more on your home than it’s worth. Homeowners without integrated equity may have less reward to keep paying on a house with decreasing worth.
  • Going too expensive: Putting newbie purchasers in houses they can’t manage might injure both loan providers and property owners, annihilating credit report and triggering foreclosures.
  • Interest: Depending on your lending institution, you might have a greater rates of interest and you’ll pay more interest over the life of the loan despite the rate.
  • Mortgage insurance coverage: You’ll have an extra expense if you need to have home mortgage insurance coverage, which is normally needed on loans greater than 80% of the house’s worth.

Kaz Weida is a senior author for The Penny Hoarder.


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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