Bank of America has decided to provide special benefits to certain demographic groups, but not others simply based on their demographic.
The Daily Caller reported, Bank of America announced Tuesday a new zero-down payment, zero-closing cost mortgage for first time minority homebuyers.
The trial program is aimed at helping first-time home buyers from Hispanic and black neighborhoods with the offer of mortgages without requiring down payments, closing costs, or minimum credit scores, according to a statement released by Bank of America.
Bank of America aims to ensure that 60,000 minority families have received housing thanks to their help by 2025. The bank has spent nearly $10 billion on down payment loans and grants thus far.
The program will only be available to minority communities in certain cities. These cities are Dallas, Detroit, Los Angeles, Miami, and Charlotte, North Carolina.
Eligibility will be determined by neighborhood location, and race is not necessarily required on the application.
Bank of America’s head of neighborhood and community lending explained, “People can use other mechanisms to define their creditworthiness, buy a home and build their wealth.”
The bank acknowledges the ability to determine creditworthiness outside of credit score but makes the option available only to select people..
Many outsiders fear the consequences that such loans if predatory may entail. Some Twitter users argue that it could “devastate” minority communities.
Others have likened the loans to subprime loans that caused the market crash of 2008 leading to the recession and causing homeowners to become homeless.
This strikes a resemblance to countless other affirmative action programs that benefit some groups and disadvantage others.
In a technical sense, the male demographic is actually a minority in the U.S. but the program clearly aims to benefit some racial minorities.