LINTHICUM, Md. (8/19/14)--Using down-payment assistance programs, credit unions across the country are helping members, particularly first-time homebuyers, finally achieve their dreams of homeownership.
In many cases, recent trends have shown, a clean bill of credit health and a strong income may not be enough to purchase a home, in large part because of the rising costs of plunking down a down payment.
Between 2007 and 2013, the average down payment on the most affordable properties climbed nearly $4,000 to $9,840 (
But credit unions such as State Employees CU (SECU), Linthicum, Md., with $2.8 billion in assets, are stepping up to help those previously able to qualify for a loan, but unable to come up with funds necessary for a down payment.
Through SECU's "100% Mortgage Financing Program," for as little as $1,000 a member can purchase a home (
"This is a product intended to help the local community," Kevin Kesecker, SECU vice president of lending, told the
"The intent is to overcome the hurdle of a down payment."
Mountain America CU, West Jordan, Utah, with $3.9 billion in assets, has rolled out a similar program recently to help members buy their first homes.
The credit union's "First-Time Home Buyer Loan Program," features 100% financing; down payments of as little as $1,000; one, low payment; no income limitations; and no private mortgage insurance requirements, among other benefits.
Members who utilize the program also can have monthly payments taken directly from their checking or savings accounts.
Michigan Community CU, Jackson, Mich., meanwhile, was recently approved to provide loans through the Federal Home Loan Bank of Indianapolis' Homeownership Opportunities Program. The $123 million-asset credit union can now help first-time homebuyers at or below 80% of the area's median income with their down payments, plus their closing costs.
Beth Ploof, mortgage originator for Michigan Community CU, said that because the program will allow more people to purchase homes, it also will help improve the local economy.
"These funds are a life-changer in the best way," said the first credit union member to receive help on her down payment through the program, Alise.