As part of a new set of initiatives, Citi is expanding a program that encourages homeownership in diverse communities.
HomeRun is a program that aims to help eliminate the barriers to homeownership. A lender paid assistance program that helps offset closing costs is included with the program that offers down payments as low as 3%.
In addition, Citi is launching two new pilots aimed at giving more credit access to people with limited or no credit information, as well as providing access to capital to small businesses owners in Los Angeles, with a focus on those businesses run by women, minorities and veterans.
Blacks are twice as likely to be denied a mortgage as the overall population, according to a new report.
Lisa Frison, head of financial inclusion and racial equity of U.S. personal banking at Citi, said that the moves are part of a legacy focus on financial inclusion and racial equity.
Frison said that creating access to the financial mainstream is the most important initiative.
Helping communities create assets is one of those things.
Bank of America plans to offer zero down payment, zero closing cost mortgage products to help members of predominantly minority communities buy homes.
The head of neighborhood and community lending at Bank of America said that the solution will help make the dream of sustained homeownership for more black and Hispanic families a reality.
Black homeownership has fallen according to research. There would be 770,000 more Black homeowners if the rate of homeownership were the same as it was in 2000.
Black homeownership was still lower than it was a decade ago even as the U.S. homeownership rate surged to record highs. High levels of student loan debt are just one of the obstacles that prevent black Americans from buying homes.
Financial institutions might be able to reach out to new markets if mortgage lending activity continues to cool.
It may be that mortgage lending at some of these institutions now has an opportunity to better serve some of these communities.
The HomeRun program can be used to help low- to moderate-income borrowers. Frison said that borrowers who have less than median family income are usually included.
The program has been expanded to include both income and geographic eligibility.
The program currently targets borrowers with less than 80% of the family median income and will increase to less than 120% of the family median income based on census data.
Frison said that it will allow more people the chance to take advantage of it.
The program will be expanded by Citi. San Francisco, Los Angeles, New York, Miami, Washington, D.C., and Chicago are some of the cities where HomeRun is available.
A ‘for sale’ sign hangs in front of a home on June 21, 2022 in Miami, Florida. According to the National Association of Realtors, sales of existing homes dropped 3.4% to a seasonally adjusted annualized rate of 5.41 million units. Sales were 8.6% lower than in May 2021. As existing-home sales declined, the median price of a house sold in May was $407,600, an increase of 14.8% from May 2021.It will be available in Atlanta, Austin, Denver, Dallas, Houston, Philadelphia, and Cambridge, Massachusetts, with a particular focus on majority minority census tracks.
No private mortgage insurance is required in order to save money on your mortgage, which can be used to buy a home or reduce your mortgage.
It is available to both first-time buyers and those who have previously purchased a home. It can apply to the purchase of a single family home.
The lender paid assistance program gives a credit to eligible borrowers. The amount will be raised to $7,500 from $5,000.
Alternative ways of assessing credit readiness will be looked at by Citi in order to expand credit access for homeownership. If a credit score is not available, it will look at other factors, such as rent and utility payments, in order to gauge an application's ability to repay their debts and become a successful homeowner.
A group of community loan officers who will have community connections are also being hired by Citi.
Frison said that they would work hard to make sure that message got heard.
In addition, Citi is launching two new pilots aimed at making credit cards available to populations who are considered invisible, as well as a special purpose credit program for Los Angeles-based small businesses.
The Office of the Comptroller of the Currency is leading the effort to promote financial inclusion through access to credit and capital.
People who have limited to no credit information can be approved for a credit card through the credit invisibles program.
The program will try to find out if other data is available to approve credit applications for people who are not approved through the traditional process.
Blacks and Hispanics are more likely to be unbanked or underbanked than whites.
Without access to traditional lending services, many who are unbanked or underbanked turn to higher cost products such as payday loans The average interest rate on a credit card is 17.8%.
Frison said that a credit card is one of the most basic necessities from a financial management perspective.
Early next year, Citi will begin giving technical assistance resources and access to capital for Los Angeles-based small business owners, with a particular focus on women, minority and veteran business owners. Expansion of the program to additional markets is the goal.
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