April 2 (UPI) -- Bank of America said Tuesday it's rolling out a $5 billion program to help tens of thousands of low-to-mid-range income earners buy homes.
The bank said it's committing the cash to its Neighborhood Solutions Program over the next five years. It's designed to approve borrowers who'd otherwise have difficulty securing financing. The program uses "specially-designed products, resources and expertise," to help borrowers with sustainable ownership.
"Our commitment to affordable and responsible homeownership is greater than ever, with half of our loans going to low- to moderate-income or multicultural families," Steve Boland, head of consumer lending at Bank of America, said in a statement. "We know many of our clients want the power to own their first home, which can sometimes be challenging."
Lenders say making down payments and covering closing costs are two major obstacles for lower-income home buyers. The program helps in those areas by offering up to $10,000 for those purposes, the bank said. The program will start in the coming weeks. It also includes grants BoA says can be applied to non-recurring closing costs, and uses a national network of affordable housing partners to provide education and counseling.
Bank of America and Boston-based nonprofit brokerage Neighborhood Assistance Corporation of America have been backing the revival of the subprime mortgage market in recent months. The institutions have also started offering home loans to borrowers with fair-to-poor credit. Both companies said they now have a greater focus on ensuring the loans can be repaid, since offering unaffordable loans to borrowers a decade ago contributed to the financial crisis.