Credit unions around the country have been using a mixture of increased borrower education, a wide variety of mortgage loan products and different loan strategies to help their members qualify for mortgages, industry executives explained.
One example of this trend is the 162,000-member, $1.41 million UW Credit Union, headquartered in Madison, Wis.
Having a wider variety of mortgage products helps credit unions assist members in overcoming their individual challenges when seeking a mortgage loan, according to two UW executives.
UW is the largest housing finance lender in the Madison metropolitan area.
Mike Long, chief credit officer at UW, and Julio Rios, director of mortgage lending, said the CU was on track to book roughly $100 million in purchase money mortgage loans and between $260 million and $300 million in refinance loans this year and emphasized the impact a wide product line can have.
“For example, if a borrower might not qualify for a conventional mortgage with mortgage insurance, he or she might qualify for a FHA insured mortgage that is a little more lenient on credit scores and down payments,” Long said.
“Having that option, the FHA option can mean the difference in being able to get the loan or not,” he added.
FHA loans as well can be tweaked or adjusted to obtain a qualification. A down payment gift from family, something that is allowed in an FHA insured loan but not in a conventional, could help make the difference, Rios added.