ROCHESTER, N.Y. - Add The Summit Federal Credit Union to the relatively short list of credit unions participating in Fannie Mae's Smart Commute mortgage initiative, a program that encourages the use of public transportation. Fannie Mae currently facilitates the program in nearly 30 metropolitan areas across the country, but has historically selected banks to act as the local lender. The Summit joins five other credit unions known to participate in the program, including Municipal Employees Credit Union in Baltimore, North Carolina's State Employees Credit Union, San Antonio Federal Credit Union, America First Credit Union of Salt Lake City, and credit-union-for-now Community Credit Union in Texas. Why The Summit? Vice President of Lending Mark Gregory said the $340-million institution has a history of participation in Fannie Mae programs, and the secondary lender trusts The Summit. "The reason they chose us as the lender - and we're the only lender in this area - is because they knew we would sell the loans back to Fannie Mae as agreed," Gregory said, adding that in other cities, banks were instead keeping the profitable mortgages on their books. Homebuyers may participate in the Buffalo Niagara Smart Commute Initiative by purchasing a home within a half-mile of a metro rail station or bus stop. Assuming homebuyers will be more likely to use public transportation, saving money on fuel and vehicle upkeep, The Summit will add a portion of the potential transportation savings to borrowers' qualifying income. Two wage-earner households can qualify for as much as $250 extra qualifying income per month, increasing the home-buying power of a Buffalo-area median-priced home by approximately $10,000. The timing couldn't be better for The Summit, which is based in Rochester, but recently built a new branch in Buffalo. The credit union hopes local publicity will help the 46,000-member institution increase its market penetration in the area. Gregory said Buffalo realtors have already called the credit union to inquire about the program, thanks to advertising by the Buffalo Niagara Association of Realtors. Additionally, the local transit authority plans to promote the program by using display advertising on buses, and will distribute a brochure explaining the program along with transportation schedules. The Summit also participates in Fannie Mae's My Community program, which assists low and moderate income households with downpayment requirements, lowering them to as little as $500. The Summit sells My Community loans to Fannie Mae, although the credit union retains the servicing on the mortgages. The Summit also donates 1% of the total mortgage amount toward closing costs to qualified My Community borrowers, which comes directly from the credit union's budget, not Fannie Mae. The credit union does not charge an origination fee, making mortgages even more affordable. Because the credit union includes underserved areas in its charter, it's important to offer programs like My Community and Smart Commute, the VP said. "We're already helping out in so many underserved areas for loans, and this kind of fell in our lap," Gregory said, adding, "We were very interested in it, but of course, we hope it results in other loans, too." Gregory said The Summit has an overall institution goal of doubling its average member relationship over the next three years. Currently, members average $11,000 in total deposits and loans. Gregory acknowledges that participation in Fannie Mae programs won't directly increase member relationships, since The Summit sells those products back to the secondary lender. However, the credit union hopes members will bring additional business to the credit union if their mortgage is serviced there. -

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