MADISON, Wis. — With the national attention turned to problems in mortgages to low-income borrowers and a high number of foreclosures, a credit union-backed program aimed at that same market continues to have slow but steady success.
As of Dec. 10, 163 credit unions are participating in the Credit Union National Association’s Home Loan Payment Relief, or HLPR Loan. The HLPR program — a low-rate mortgage for first-time homebuyers from their credit union — was created to target credit unions whose household income is 100% or less of the area median income, with the exception of certain high-cost areas designated by Freddie Mac based on HUD data.
“Those credit unions have committed $1.388 billion to the HLPR program,” said Steve Rick, senior economist for CUNA. “$785 million in HLPR loans have been originated since the start of the program.”
According to Rick, the current 3/1 ARM HLPR rate is 5%, which is one percentage point below the current national average 3/1 ARM rate of 6%.
In addition, there have been about 8,400 applications for a loan, with about 6,000 of those being approved, according to CUNA. Out of those 6,000, more than 3,800 loans were originated, with the total loan originations at about $785 million.
Each CU Structures Program Its Way
According to CUNA, credit unions use their own underwriting criteria, except for a 3% maximum required down payment. Each credit union grants and funds the loans to its own members. The participating credit unions cannot make up for the lower rate with higher fees, points or other gimmicks.
One of the newest credit unions to join the list of others participating in the HLPR program is Mountain American Credit Union in Salt Lake City.
“It offers a substantial savings and has allowed many members to qualify for a home they would not have qualified for without the HLPR product,” said Jeanie Olsen, vice president of mortgage services for Mountain America CU, in a prepared statement. “Using a $200,000 loan as an example, the monthly savings for the member would be $184.58, or $6,644.88 over a 36-month period.”
Wescom Credit Union, in Pasadena, Calif., also participates in the HLPR program.
“In addition to helping members when they purchase a home, these programs help to educate first-time homebuyers about the responsibilities that come from with home ownership,” said Darren Williams, CEO of Wescom.
Jon Paukovich, director of real estate lending for Ent CU, agreed.
“This past year Ent has made strides in reaching out to interested homebuyers in creative ways,” he said, including participating in the HLPR program, and building partnerships with local Realtor associations.
(c) 2007
