Bank of America Corp has said that it would invest $15 billion in affordable housing initiatives over the next five years, tripling its commitment as a booming mortgage market caused it to hit its prior goal early.
In 2019, the second-largest US lender said it would give $5 billion to 20,000 low-to-moderate income homeowners through a mix of grants and loans through 2024, reports Reuters.
“I’m pleased to say that we’ve gotten a lot further than that and we already have done over $5 billion to help create 21,000 new homeowners to the commitment,” President of Retail Steve Boland said in an interview on Wednesday.
The new $15 billion commitment aims to reach 60,000 new home buyers and includes down payment and closing cost grants which could provide customers with up to $17,500 to help finance their new home.
Strong mortgage demand fueled by low interest rates during the pandemic helped the bank beat its expectations, Boland said. The bank also tripled the number of dedicated community lending officers to help find new customers.
Last year, the bank also got a green light to start paying agencies that advise struggling home buyers for referrals after regulators relaxed rules barring kickbacks between such agencies and lenders that may increase the cost of buying a home.
The announcement comes against the backdrop of growing calls to address the national shortage of affordable housing amid record unemployment. The issue is also of major interest to President Joe Biden, who included a $640 billion housing plan in his campaign.
Half of the bank’s outstanding home loans are to low- to moderate-income or multicultural families and communities, it said. Still, more than two thirds of its $237 billion mortgage portfolio was dedicated to jumbo loans to wealthy customers as of September, according to Inside Mortgage Finance data.