Miami-based City National Bank has created a new affordable housing program to help low- and moderate-income families gain time to secure financing to buy homes.
The bank, which is Florida’s third largest bank by assets, is creating the CNB Housing Foundation with a $1 million donation. Under the program, the bank will purchase homes from sellers, hold the properties for a short time, and then sell them at the same cost to the buyers.
The bank said it is creating the foundation since low-income families often face intense competition from investors, cash buyers and flippers for properties. Sellers will often prefer selling to cash buyers quickly before low- to moderate-income families have time to secure financing.
The foundation will work with any low-to-moderate-income buyer, including buyers seeking financing from other financial institutions, and the bank said that neither it nor the foundation will make a profit from the sale of the real estate.
Miami is consistently ranked as one of the least affordable places in the country when it comes to housing costs compared to the median income. Some local banks have come under scrutiny for their focus on lending to the area’s high net worth population rather than working with low- and moderate-income borrowers.
Nationally, some banks have recently sought out new programs to increase their lending to low-income borrowers. Bank of America, for example, has partnered with Boston-based brokerage Neighborhood Assistance Corporation of America. The bank is giving out $10 billion in mortgage commitments to borrowers with non-traditional backgrounds.