Bank of America announced plans last week to provide $500 million in home loans with no down payment requirement to low-income households in select areas of the 23 states in which it has branches and the District of Columbia.

"The two key components in the plan are that the households be at the low-income level and have an excellent credit history," said Mark Ulmer, senior vice president of BankAmerica Mortgage, BA's residential mortgage lending arm.Ulmer said the 30-year, fixed-rate loans would be made at the San Francisco-based bank's prevailing interest rates for such loans around the country.

BA said, however, that borrowers would need "significantly less cash to complete a home purchase than is required with a traditional 3-percent-down or a Federal Housing Administration (FHA) mortgage.

For a $100,000 home purchase price, for example, consumers using the BA plan would need about $2,028 to close the transaction or less than half the amount needed for an FHA or 3 percent-down loan, it said.

In addition to eliminating the down-payment requirement, BA will also waive its usual application and commitment fees. That will produce a savings of up to $1,000, Ulmer said.

To be eligible, households must have an annual income that doesn't exceed 80 percent of median income for the metropolitan statistical area where the home is located.

General Electric Capital Mortgage Insurance Corp. will provide mortgage insurance for the loans, and BankAmerica Mortgage will back up to 3 percent of the loan "in the unlikely event of a default," the bank said.