Mortgage Program For Teachers Tops $140 million

- SACRAMENTO, Calif. (6/19/01)-A zero-down-paymentmortgage program for California's public school teachers topped$140 million in less than a year, according to Freddie Mac and theCalifornia State Teachers' Retirement System (CalSTRS). Five creditunions and seven bank or mortgage companies belong to the networkof approved lenders. The CalSTRS Home Loan Program's zero-downmortgage option has enabled about 1,429 teachers and other schoolemployees to buy homes, according to a report in the Los AngelesTimes. "It's worked out very well for us," said Gene Shabinaw, VPlending at California Coast CU. "Initially we were doing a fewloans and now we're doing four or five a month. They provide uswith information daily through a loan-rate sheet and we underwriteit to their standards and rates and the programs that they have."Credit unions initiate the mortgage, which is then taken by CalSTRSand sold to Freddie Mac. A first mortgage with a 95% loan-to-valueratio from the credit union is combined with a 5% deferred-paymentsecond mortgage from CalSTRS, one of the nation's first publicpension funds to become a Freddie Mac seller/servicer. The proceedsfrom mortgages sold to Freddie Mac are used to finance newmortgages at below market rates.