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A “No Gimmicks” low-rate mortgage for first-time homebuyers from their credit union.

• This program is targeted to credit union members whose household income is 100% or less of the area median income, except for certain “high cost” areas designated by Freddie Mac based on HUD data

Participating credit unions will offer one or more of the following mortgage products to their qualifying members:

• The original HLPR loan is a three-year adjustable rate mortgage, with an interest rate discount of 1% off the nationwide average 3/1 ARM interest rate. The HLPR 3/1 ARM will have its rate fixed for three years, then adjust annually to the 1-Year CMT Treasury with a 2.75% margin. Annual adjustments are capped at 1% with a lifetime cap of 5%.
• Fixed-rate option Credit unions may offer their qualifying members a 30-year fixed-rate HLPR loan that features a 3-year 1% buydown. Credit unions may use either their own standard 30-year mortgage rate to apply the 1% discount, or a national average 30-year interest rate that CUNA will publish weekly, using similar calculation methods as the national 3/1 ARM rate.
• 5/1 and 7/1 ARMs Credit unions may offer longer term ARMs with a 0.50% buydown based off their standard 5/1 and 7/1 ARMs. The 0.50% buydown would apply during the initial five or seven years periods of these loans.



• Credit unions use their own underwriting criteria, except for a 3% maximum required down-payment and gifts/grants are permitted. Also, credit unions will permit higher “backend” payment ratios of at least 42%.
• Each credit union will grant and fund the loans to its own members.
• Credit union will not make up for the lower rate with higher fees, points or other gimmicks. In fact, credit unions will be encouraged to seek and pass on to members reductions in closing costs and private mortgage insurance costs.

For more information: http://www.cuna.org/initiatives/hlpr/index.html