PINE BROOK, N.J. -- New York State area credit unions have a new mortgage option to offer their members--a new co-op lending program introduced by CU National Mortgage.
Through a relationship between US Mortgage Corporation, the parent company of CU National Mortgage and Chase Mortgage, credit union clients of CU National Mortgage are now able to offer co-op loans in New York's Nassau, Suffolk, Westchester and Rockland Counties, as well as the five boroughs of New York City.
The company's new co-op loan program works by using share loans to purchase a share or membership in a cooperative housing corporation. CU National says the loans are a unique form of financing that looks like a mortgage, but are "structurally different."
When buying a co-op loan, members are not directly purchasing the real estate, but rather an ownership interest in the corporation that owns or leases the real estate.
CU National says many large financial institutions in New York City's Manhattan already offer co-op loans, but only a few credit unions have considered offering the product.
"Credit unions that serve members in these areas are well-suited to provide this form of financing. Using a credit union as a source of affordable housing, the quality and expense of this type of loan may be controlled," said CU National Mortgage President Michael McGrath.
He explained that the co-op loan is paid by using many of the same product types available for conventional mortgages such as fixed-rate loans, adjustable-rate products and other options.
In addition to making the monthly payment on the loan, the co-op owner pays a monthly association charge, which represents a proportionate share of operating and maintaining the co-op.
According to the company, Suffolk Federal Credit Union, based in Medford, N.Y., has already begun using the co-op loan program. Lorna Curtin, mortgage director for the $683 million credit union said the co-op loan program "opens many doors for our members, especially members who are looking to buy their first home..." and otherwise could not afford to purchase one because of the current market and high prices of real estate in the New York area. --firstname.lastname@example.org