BECU in Tukwila, Wash., is bringing back its first-time homebuyer grant program for a second year as it attempts to help its members afford increasingly expensive real estate in the Evergreen State.
BECU has set aside $1 million to go toward down payment assistance for members who meet eligibility standards. Grants will be available in amounts up to 2 percent of the home’s value, capped at a maximum of $6,500. Members must buy their home with a fixed or adjustable-rate mortgage loan from BECU, in amounts up to $484,350.
“As a not-for-profit financial cooperative we offer certain programs that return money to our members, and this is one of them,” said Lorraine Stewart, vice president of mortgage lending at the $19.6 billion-asset institution.
In 2018 the program granted roughly $772,000 to 146 members, and BECU has the goal “help even more of our members this year,” Stewart said.
Last year, the average grant amount was $5,289, and the majority of properties purchased were single family residences. The second most popular category was low-rise condos. The city that saw the most grant-aided purchases was Tacoma (14 percent), followed by Auburn (9 percent), and then Everett and Federal Way (8 percent each).
BECU made two tweaks to the program last fall – lowering the minimum credit score to 660 from 680, and decreasing the loan-to-value ratio from 97 percent to 95 percent. The higher LTV worked against a small percentage of potential recipients, Stewart said.
“Some of our members have some money to put down, and combining that money with the grant money allows the members to have a lower monthly mortgage payment,” Stewart said
BECU does not view the members who participate in the down payment assistance program to be “any riskier” than other members who borrow from it, and therefore it does not make any adjustments to its underwriting or pricing. Many participants in the program use the Fannie Mae HomeReady program, which works with BECU’s grants.
“The members who were in the program last year were well-qualified borrowers, but they just needed a little help in with their down payment,” she said.
The second year of the program launched Feb. 20. Stewart said BECU’s loan officers knew the program was coming back, so some applications were taken in advance of the public announcement. The program is available first-come, first-served, until the $1 million is exhausted.
BECU is formally known as Boeing Employees Credit Union. Membership is open to all who live or work in Washington state, plus select counties in Idaho and Oregon. It also serves select employer groups.
