CU, Sponsor Co. Partner On Home Ownership
Tyson Credit Union employees are $3,000 to $5,000 closer to buying a new home as part of the CU's partnership with Tyson Foods, Freddie Mac, and the National Credit Union Foundation.
"We had been talking with Tyson Foods about ways we could serve employees better and ways they could help employees and stabilize their workforce," said Mark Wilburn, senior VP/chief lending officer of Tyson CU, a division of 66 Federal Credit Union.
With the help of Freddie Mac's "Catch the Dream" initiative-a set of 25 efforts designed to help achieve President George W. Bush's goal of adding 5.5-million minority homeowners by the end of the decade -the partners created an affordable housing program to provide non-traditional credit to Tyson employees across the nation interested in purchasing homes.
Tyson Credit Union, its sponsor and the National Credit Union Foundation each contributed $75,000 as seed money. Tyson is also setting up special ATM-style kiosks in selected plants that will provide around-the-clock information in English and Spanish about the Workforce Home Benefit initiative, as well as information on the home buying process, financial literacy and credit counseling. The kiosks will be located at the Randall Road Plant, Springdale, Ark., as well as in Wilkesboro, N.C.; Cumming, Ga.; Storm Lake, Iowa; Carthage, Miss.; Finney County, Kan.; Lexington, Neb.; and Seguin, Texas.
Tyson Credit Union will then provide qualified borrowers with access to mortgage products designed specifically for families with nontraditional credit histories or limited cash for down payments. Freddie Mac envisions purchasing as much as $50 million in eligible mortgages, ensuring a steady supply of mortgage credit for additional borrowers.
"This is not a poor credit program," Wilburn said. "It's targeted toward the unbanked-those who don't have relationships with financial institutions."
In its first week of introducing the program in mid-February, dozens of applications had filtered in, Wilburn said, adding the credit union was in the process of assessing them.
To be eligible for the no-interest loan toward a down payment or closing costs, employees must earn less than $54,000 annually and have worked for the company for at least two years. The company estimates that just over half, or 65,000 employees, could qualify for the program, which seeks to facilitate $50 million worth of mortgages.
As an added draw - and an effort to retain good employees - Tyson Foods will forgive one-fifth of the loan for each subsequent year the borrower continues to work for the meat and poultry processing company.
For example, Wilburn said, "Someone with a $5,000 second lien who stays employed with Tyson Foods will only owe $4,000 at the end of the second year and $3,000 by the end of the third year. As long as they stay in the home (and work with Tyson), they loan is completely forgiven."
Wilburn said employees must also agree to participate in pre-purchase, post purchase and - if necessary - early delinquency credit counseling with Balance Financial Fitness, a nationwide credit counseling group based in San Francisco.
Not Giving Up
Wilburn stressed that employees who don't meet the loan qualifications will be encouraged to work with the financial counselors to rehabilitate their credit so they can become eligible.
"We want them to go to BALANCE to get some education," Wilburn said. "This is not one of those things we were turn you down and drop you. We want it to a long-term relationship. If they don't qualify right now, maybe they will (qualify) a year down the road."
66 FCU has $350 million in assets, with $35 million of that part of its Tyson Credit Union unit.