A major community bank on the South Shore says it will make buying a home in its home city of Brockton easier and launch an internship program in an effort to simultaneously diversify its ranks and attack the racial wealth gap.

The $4.4 billion-asset HarborOne Bank said Thursday it will lower the minimum credit score a first-time homebuyer must have to purchase an owner-occupied one- or two-family home in the majority-minority city south of Boston where it’s headquartered, and drop private mortgage insurance requirements for first-time borrowers with high loan-to-value ratios. The minimum FICO score a borrower must have under the “Building Brockton” mortgage program will be 650 for loan-to-value ratios of 97 percent or less and 680 for ratios between 97 percent and 100 percent. In conventional fixed-rate mortgages, the bank does not finance loan-to-value ratios up to 97 percent or above – typically those seen among first-time homebuyers – without private mortgage insurance and debt-to-income ratios up to 55 percent.

The bank has also signed up to offer MassHousing’s no-interest down payment assistance loans, which top out at $25,000.

The program will also provide homebuyers purchasing in Brockton a 25 basis point discount on their mortgage rate for owner-occupied one-, two- and three-family homes. HarborOne has partnered with the MassHousing Workforce Advantage loan program and will either offer from HarborOne’s program a reduction in rate or if they select the MassHousing program they’ll receive a $2,500 credit towards closing costs as part of the homebuying purchase.

In total, the program could make it substantially cheaper for Brockton homebuyers to secure a home. Substantial research by the Federal Reserve Bank of Boston and others shows that much of Greater Boston’s infamous Black-white racial wealth gap is rooted in homeownership disparities initially encouraged by lenders and the federal government which later went unaddressed for decades.

The bank said it was committing up to $20 minion in residential home sales through this program. Brockton’s 2020 median single-family home sale price was $345,500 and the median condominium sale price was $179,000 according to The Warren Group, publisher of Banker & Tradesman.

“The American Dream should be attainable for each one of us – no one should be shut out. These programs will make it easier to reach that dream,” HarborOne CEO James Blake said in a statement. “We want more families to stay in Brockton and be invested in Brockton – and our Building Brockton program will do just that.”

HarborOne also plans to launch an internship program for Brockton High School students that offers mentorship from a dedicated group of HarborOne employees. The aim of the program, the bank said in a statement, is to expose students to the banking industry and other business related careers in an effort to help inform their class selections, preferred work environment and potential career paths.

The bank was also partnering with Brockton’s Massasoit Community College and Brockton High School to provide a pool of scholarship dollars to fund tuition costs, books, transportation and other expenses for 24 Brockton High juniors and seniors studying at Massasoit as part of an early college program. The students receive credits that could add up to a full semester of college, reducing the price tag of some subsequent higher education program they pursue in Massachusetts. Even small costs like those the bank plans to underwrite, it said, can make the difference for a student struggling to afford to stay in such a program.

“Early College programs help students get to college ready to succeed, and by completing credits before they finish high school, the cost of college becomes much more affordable,” Massasoit President Dr. Gena Glickman said in a statement. “Research is clear on the benefit of Early College programs – we know that early college students enroll in postsecondary education at a much higher rate than students from traditional high schools. We also know that students of color who attend early college high schools are nearly ten times more likely to obtain a college degree than students of color who don’t.”

HarborOne Launches DEI Strategy with Workforce, Homebuying Focus

by James Sanna time to read: 3 min