Wells Fargo (WFC) will provide $7.5 million in housing and economic assistance in Memphis, Tenn., and surrounding Shelby County to settle a reverse redlining lawsuit.
The Memphis and Shelby County governments filed the suit in 2010, charging the bank with targeting minority borrowers with high-cost mortgages. They based the suit on claims from former employees at the bank.
Wells will provide $4.5 million in down payment and renovation assistance as part of the settlement. Potential homebuyers can apply for up to $15,000 in grants under the program set to launch later this year.
To qualify, family income must be below 120% of the area median income, and an eight-hour homebuyer education session must be completed. Grantees must also agree to live in the home for five years or payback a portion of the down payment.
“The condition of the local housing market continues to challenge Memphis and Shelby County significantly, as unoccupied homes and excessive housing inventory weigh heavily on communities,” said Memphis Mayor A C Wharton Jr.
Wells will also provide $3 million for local programs already under way. The San Francisco bank set a lending goal of $425 million in home loans for the area, including $125 million to low- and moderate-income borrowers.