When Juan Esparza first heard about the loan program, he thought it was a scam.
It was his second attempt to apply for a home loan. He was speaking to a representative from IBC Bank on the phone when they brought up the Community Homeownership Program.
“[It] sounded too good to be true,” Esparza, 31, said. “I said, ‘Can I meet you?’ I didn’t want to fall into a scam.”
It was only after he met the loan officer face to face in an IBC Bank building that he started to realize the program might be real.
“I was scared of it,” Esparza said. “I didn’t know what the catch was.”
The IBC Bank pilot program offers prospective homeowners in low-income areas zero-dollar down payment loans and alternatives to a typical credit check. The bank’s Community Homeownership Program started in 2023 as a way to help community members that typically face barriers to buying a home.
Will Shipp, a senior vice president of the Laredo-based bank, said the pilot program was developed after working with nonprofits and regulators to best meet the needs of underserved communities. They help residents who make less than 120% of the area median income look for homes that cost between $200,000 and $300,000 in specific census tracts.
“[It targets] those marginalized or underserved communities where the bank has a presence,” Shipp said. “There’s really just a small part of San Antonio where this isn’t available.”
IBC Bank keeps the loans on its books rather than selling them on to government-controlled companies such as Fannie Mae and Freddie Mac, which typically package home loans for investment.
“We’re willing to accept a greater risk in order to complete the home buying process for the underserved communities we work with,” Shipp said.
IBC Bank also reduces risk by partnering with the nonprofit Business and Community Lenders of Texas. BCL of Texas provides financial education to prospective homeowners and can help guide them through the application process.
“Whenever this program came out, it was a little bit of an eye opener,” said Pamela Garcia, chief of staff at BCL of Texas. “You’re showing alternative ways of, ‘Hey, I know how to handle my money.'”
The Special Purpose Credit Program’s users might not have robust credit histories, but they do have to show they can handle money responsibly, she said. That means they have to have good debt-to-income ratios and show they don’t have a history of late payments for rent, vehicles and utilities.
BCL of Texas advises applicants who have issues with their credit or bank histories on how to fix them. Sometimes, it’s as simple as explaining a one-time hospital visit.
Loans with no down payment can be more expensive, Shipp said, but IBC Bank also provides assistance with closing costs and cuts out mortgage insurance.
Esparza said his $2,100 monthly mortgage payment is manageable.
The required eight-hour, federally-approved homeowner education course was also helpful. Esparza learned about his tax and insurance obligations and keeps track of survey information and his easement rights.
A part of broader efforts
IBC Bank is not the only entity that sees credit scores and up-front payments as barriers to homeownership.
Jung Hyun Choi is a research associate with the Urban Institute’s Housing Finance Policy Center. Choi has studied people’s ability and risk to pay their mortgage. Credit scores tend to be good predictors of mortgage payment, but so is rent, she said.
Often, she added, rental payments are not incorporated into credit scores.
“There is a greater movement to improve rental reporting,” Choi said. “If we include rental payment data into the credit-scoring model, those with no credit scores or low-credit scores benefit the most.”
That can help marginalized communities that regularly pay rent, but might not have as much traditional banking history.
Lorraine Robles, chief real estate and development officer for Opportunity Home San Antonio, said she’s seen San Antonio residents struggle to get traditional home loans.
Opportunity Home is the City of San Antonio’s housing authority. It runs its own affordable homeownership program, building homes and selling them to low-income residents at affordable prices. Like IBC Bank’s pilot program, Opportunity Home offers assistance with the upfront costs.
In 2025, Robles said, there were fewer offers on its houses because it was more difficult for residents to qualify for loans. IBC Bank and Frost Bank have both launched programs to help fill that gap.
“That’s why affordable homebuying programs are so important. That’s why we need banks to build those programs,” she said.
‘Very strange and awesome’
Around 200 households have used the pilot program since IBC Bank started in 2023. Shipp said demand for it jumped by 125% between 2024 and 2025.
Esparza can see why. More people should know about it, he said. He and his partner closed on their house in Northeast San Antonio in October 2025.
The $250,000, four-bedroom house is the first home he’s owned. Each of his children will get their own room.
“It’s very strange and awesome because not many people in my generation will get a chance to do it,” Esparza said.
Now, he’s focused on maintenance and pest control. It’s work he hopes will improve the value of his house.
“You’re never done working on your home,” Esparza said. “That’s the fun part of owning a home.”
