B OF A ASKING ZERO DOWN FOR HOMES; LOAN PROGRAM AIMS FOR LOW-WAGE EARNER.Byline: Gregory J. Wilcox Daily News Staff Writer Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , one of the nation's largest mortgage lenders, said Monday that it is providing $500 million for a zero down payment home loan program for low-income wage earners nationwide. The Neighborhood Advantage Zero Down program, available in 23 states and Washington, D.C., is designed to make home ownership available to families with low incomes but excellent credit histories. The San Francisco-based banking giant said the program marks the first time that a conventional mortgage requiring no down payment has been offered on such a widespread geographic basis and at such a significant lending commitment level. The program, featuring 30-year, fixed-rate loans Fixed-rate loan A loan whose rate is fixed for the life of the loan. , also is available to borrowers who are buying or refinancing Refinancing An extension and/or increase in amount of existing debt. a home in low-income neighborhoods. To be eligible, a borrower must have an annual income that does not exceed 80 percent of median income for the Metropolitan Statistical Area where the home is located. But there are no income limits for borrowers if the home is located in a low-income census tract A census tract, census area, or census district is a particular community defined for the purpose of taking a census. Usually these coincide with the limits of cities, towns or other administrative areas and several tracts commonly exist within a county. . The maximum annual income allowed for loans for properties outside low-income areas of the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. metropolitan area will be $39,840. ``We have a commitment to community development and lending, and we were concerned we weren't serving the customer segment of low-income borrowers who have good credit but just could not accumulate Accumulate Broker/analyst recommendation that could mean slightly different things depending on the broker/analyst. In general, it means to increase the number of shares of a particular security over the near term, but not to liquidate other parts of the portfolio to buy a security the case to close (an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. ),'' said Stephanie Smith, national manager of community lending for BankAmerica Mortgage. ``We think this is good for business.'' A Bank of America spokesman said the income level in the Los Angeles area means that participants could buy a home worth $120,000. That likely will mean that participating buyers in the Los Angeles area would be able to purchase condominiums or townhouses rather than single-family homes. Analyst Nima Nattagh at Experian, a real estate market information company, said the program illustrates how robust the home-selling market has become. ``Lenders such as Bank of America are turning to programs like this simply because of fairly high-paced competition going on in the real estate lending industry. Obviously, lenders have to resort to programs they would previously not have considered in order to generate business,'' he said. |
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