This bank is helping more low-income Americans buy homes

Buying a home can be a challenge even in a normal housing market (as opposed to today’s market, where house prices continue to soar and low inventories give sellers a major advantage. ). And while there are programs available for borrowers with limited funds for a down payment, like FHA loans, it can be difficult to qualify for a mortgage on a lower income.

As such, low-income buyers have long struggled to become homeowners. But some banks are trying to change that.

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More options for low income buyers

In September, sales of existing homes were up 7% from the previous month. However, first-time buyers made up only 28% of those deals, according to the National Association of Realtors. But low-income buyers may soon have more options available to them.

Some financial institutions have programs designed to help low-income buyers buy a home. Bank of America is one of them, and its Bank of America Home Ownership Community Engagement aims to help more than 60,000 buyers buy a home by 2025.

So far, Bank of America has helped 29,000 buyers buy homes and has awarded $ 270 million in grants. Among these 29,000 buyers, around 85% are first-time buyers.

The Bank of America program offers a few options to help low-income buyers. Its down payment grant program gives eligible buyers 3% of the purchase price of a home, up to $ 10,000, towards a down payment. And this sum does not have to be reimbursed.

Meanwhile, his America’s Home Grant program offers lender credit of up to $ 7,500 for closing costs. This grant also does not have to be repaid and can be combined with the down payment grant.

Low-income buyers should explore their options

If you’re struggling with limited income, you don’t necessarily have to give up the idea of ​​buying a home or qualifying for a mortgage. On the contrary, it is worth exploring the programs that may be available to you.

While homeownership isn’t for everyone, there are many benefits to be reaped. On the one hand, homeowners have the opportunity to increase the equity in their home. This equity can be turned into cash when a home is sold, and it can also be borrowed in the form of a home equity loan or line of credit (HELOC).

In addition, homeownership can lead to greater financial stability. And there are tax advantages to taking advantage of when you buy a home, such as the ability to deduct the interest you pay on your mortgage as well as your property taxes.

A number of major lending institutions outside of Bank of America offer programs to help low-income buyers. Wells Fargo offers repayable down payment loans through its NeighborhoodLIFT program, which is available in some areas. And this year, JP Morgan Chase has expanded its $ 5,000 grant program to help buyers in minority neighborhoods cover their down payments and closing costs. As more and more programs like this are introduced, it might become even easier to buy a home on a limited income and enjoy the many benefits that come with it.

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