November 2019

Making homes more affordable in your metro market

If your territory includes a metro market, you know how costly it can be for your clients to purchase a house within the city limits or even the suburbs. This is especially so if you have clients who are middle-income wage earners, in the 80% to 120% area median income (AMI) range for your metro area.

To provide the support your clientele needs, it’s helpful to understand the market forces at play, the viewpoints of industry leaders and the types of lender support that may be available.

  • Affordability issues

    Metro market home prices are typically more expensive, but, depending on your AMI, vary greatly. The spectrum runs from less competitive markets, like Indianapolis and Oklahoma City, to the more cost-prohibitive ones, including San Francisco and New York. And while metro areas typically have limited space to add housing, more and more millennials and Gen Zers are gravitating to city life, increasing the competition for attainable housing and driving prices up further.1

    A variety of factors are also raising the costs of metro housing construction. Land and labor are more expensive. There’s a nationwide shortage of construction workers. Tariffs have affected material costs on lumber, steel and aluminum, as has an infestation of mountain pine beetles on Canada’s pine forests. Regulatory costs are higher in cities too.1 2

  • Lending opportunities

    Private lenders are aware of the disconnect between need and home affordability for many median-income homebuyers, including some of your clients. Working in conjunction with government agencies, a range of home financing programs may be available. Here are a few of the programs that Bank of America offers to qualified borrowers.

    Bank of America’s Community Homeownership Commitment™ brings together resources that can help modest-income borrowers and first-time homebuyers:

  • Bank of America Down Payment Center3 — helps identify program eligibility, including directing borrowers to Bank of America programs as well as to state and local organizations that assist with up-front costs.

    America’s Home Grant® program4 offers a lender credit of up to $7,500 for nonrecurring closing costs, like title insurance and recording fees, or to permanently buy down the interest rate. The funds do not require repayment.

    Down Payment Grant5 program offers a grant of up to 3% of the home purchase price or up to $10,000, whichever is less, for a down payment in select markets. The funds do not need to be repaid. Product restrictions apply.

    Affordable Loan Solution® mortgage,6 designed for homebuyers whose household income cannot exceed their 100% AMI, is a competitive, fixed-rate loan with a down payment as low as 3% and no private mortgage insurance.

    Freddie Mac Home Possible® mortgage6 is a fixed-rate loan with a down payment as low as 3% and lower-cost mortgage insurance.

    Better Money Habits® — A bank-sponsored website that offers free tools and info to help build financial know-how about home buying and more. is a great place for your younger and less experienced clients to get started.

  • A new era is dawning

    The Urban Land Institute points out that many city planners, developers and builders are aware of the lack of housing availability for middle-income families in metro centers. Builders are also looking to extend out from current metro areas and their suburbs into the exurbs. Plus, the use of technologies like panelized and modular housing is growing, which can reduce costs.2

    A good example of an innovative solution is Garman Homes in Chapel Hill, NC.2 This community offers two- and three- bedroom homes up to 1,820 sq. ft., priced from $233,000 to $310,000. The hope is that the country is approaching a turning point and will soon offer affordable housing to your modest-income clients in your metro vicinity.

    As a Bank of America lending specialist, I’m here to help your clients learn more about our wide range of lending options.


Attainable Housing: Challenges, Perceptions and Solutions, by the Urban Land Institute’s (ULI) Terwilliger Center for Housing and real estate consulting firm RCLCO


The Bank of America Down Payment Center (DPC) is managed by Bank of America. Information on the DPC is provided as a resource for your convenience and is not a verification of, prequalification for, application to, or approval by, any third-party program provider or for any mortgage or other financing. The DPC includes Bank of America and third-party programs. Bank of America supplies the information and determines eligibility requirements for the Bank of America programs. Third-party program providers supply the information and determine eligibility requirements for their programs (Third-Party Programs). Neither the accuracy of the Third-Party Program information or the suitability of the Third-Party Program for your situation are guaranteed. Program availability and eligibility criteria are subject to change without notice. Bank of America is not affiliated with, and does not endorse or recommend, any Third-Party Program.


Qualified borrowers must meet eligibility requirements including, but not limited to, being owner-occupants, meeting certain qualifying income limitations and purchasing a home within a certain geographical area. Minimum combined loan-to-value must be greater than or equal to 80%. The America’s Home Grant Program is a lender credit. Program funds can only be used for nonrecurring closing costs including title insurance, recording fees and, in certain situations, discount points that may be used to lower the interest rate. It cannot be applied toward down payment, prepaid items or recurring costs, such as property taxes and insurance. Borrowers cannot receive program funds as cash back.


Qualified borrowers must meet eligibility requirements including, but not limited to, being owner-occupants, meeting certain qualifying income limitations and purchasing a home within a certain geographical area. Minimum combined loan-to-value must be greater than or equal to 80%. Program funds can be applied toward down payment only. Borrowers cannot receive program funds as cash back in excess of earnest money deposits. Down Payment Grant program may be considered taxable income, a 1099-MISC will be issued, consult with your tax advisor. May be combined with other offers. For properties not located in a low- to moderate-income census tract, the maximum borrower/co-borrower annual qualifying income limit is 80% of Federal Financial Institutions Examination Council Area Median Income. For properties located in a low- to moderate-income census tract, there are no income limits. These income limits are subject to change without notice. The home loan must fund with Bank of America. The Bank of America Down Payment Grant Program may only be applied once to an eligible mortgage/property, regardless of the number of applicants. Bank of America may change or discontinue the Bank of America Down Payment Grant Program or America’s Home Grant Program or any portion of it without notice. Not available with all loan products, please ask for details.


Maximum income and loan amount limits apply. Fixed-rate purchase loans, primary residences only. Certain property types are ineligible. Maximum loan-to-value (“LTV”) is 97%, and maximum combined LTV is 105%. For LTV >95%, any secondary financing must be from an approved Community Second Program. Homebuyer education may be required. Other restrictions apply.

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