To help low and moderate-income people own a property, Bank of America pledges to extend budget for mortgages by $5 billion over the next five years.
The five-year program dubbed as Neighbourhood Solutions, helps low and moderate-income people with a down payment, mortgage packages and closing costs. Under the program, homebuyers can enjoy affordable housing loans of at least $7,500 plus a $10,000 assistance for title insurance and other fees.
According to BofA Head of Consumer Lending D. Steve Boland, down payment is the main obstacle why more people are hesitant to purchase a property.
Boland said, “There are a lot of creditworthy clients that are able to meet their monthly obligations. Their biggest challenge is having the discretionary income to save up for large one-time costs.”
Besides the mortgage fund, clients can also get access to financial-education tools, the partnership with real estate firms and get free counseling. However, Boland cleared that customers applying for their mortgage solutions still need to meet the debt-to-income metrics and other requirements to get approved. The tools and free counseling aims to help customers decide how much money is manageable to borrow.
America’s Housing Bubble
Atlantic reported that America’s Housing Crisis is due to lower construction projects, adult population increase and not enough supply.
The article states, “In 60 years of record-keeping by the Federal Reserve Bank of Kansas City, home-building per household has never been lower.”
The scarcity of houses then turns to inflation, with supply reaching the roof. House prices will increase, therefore, more people can not afford to purchase.
Meanwhile, Trump administration still believe that the solution to this growing demand is about putting more walls in the borders of the United States.