The $2.3 billion Affinity Federal Credit Union has partnered with its mortgage CUSO CUMAnet and New Jersey Community Capital to establish a platform to more easily enable low and moderate income New Jersey residents to buy homes.
The three partners presented the symposium to about 100 executives from credit unions, finance firms, non-profit organizations and community banks at a Feb. 25 symposium in Newark, N.J.
The Bringing Healthy Families Home initiative will rely on each of the three partners to bring different specialties to the mortgage cycle.
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NJ Community Capital will network with non-profit community developers to build and rehabilitate available housing stock for non-profit borrowers to buy. The non-profit community lender will also network with established housing counseling groups to train borrowers in the basics of home ownership on the front end and network with investors who will buy the mortgage loans on the back end.
CUMAnet, the Credit Union Mortgage Alliance Network CUSO owned by Affinity FCU, the Credit Union of New Jersey and the Greater Alliance FCU, will take the applications and underwrite the loans as well as service tthem.
Affinity FCU will provide the initial funding for the loan pool and has already put up $20 million to fund the loans. Scott Moriarty, vice-president of lending at Affinity, said he anticipated that other credit unions, along with non-profit and philanthropic organizations, would also add to the pool.
Moriarty said Affinity had reached out the New Jersey Credit Union League for help in promoting the initiative to credit unions.
Candice Nigero, vice president of marketing for the New Jersey league, said the league had identified credit unions that were interested and invited them to attend the Feb. 25 meeting. No exact count of how many credit unions sent executives to the symposium was available.
"As the program continues to take shape, the league will continue to support Affinity FCU to help communicate the program and its progress," Nigero wrote in an email to CU Times. "Because the program is so well-aligned with the credit union movement's philosophies, we hope to see strong support and participation from New Jersey credit unions. Our initial communications regarding the program yielded some interest and we look forward to seeing that grow."
In an interview with CU Times after the symposium, Moriarty said Affinity viewed the initiative as a powerful example of what credit unions can do to impact their communities beyond the lives of their immediate members.
"We view this as a win-win," Moriarty said, explaining that the effort will help low and moderate income borrowers find homes as well as provide investors, particularly banks that have obligations under the Community Reinvestment Act, with a credible investment vehicle that can help meet CRA obligations.
In addition, Moriarty explained that CUMAnet will provide a wide variety of mortgage loans, including those associated with government programs from the FHA, VA and USDA. In addition, other loan products may be developed to help meet the special needs of both lower income borrowers and investors.
"It would be a mistake to assume that none of the loans the initiative originates will qualify as QM loans," Moriarty said. He added that the initiative will offers loans with and without private mortgage insurance and that there will the possibility of further insurance as part of their later sale.
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