"Not only will these potential home buyers have gray hair by the time they're able to afford a home, the prices will have escalated far beyond where they are today," Lytle said. "Credit unions are setting themselves apart from banks by creating lending services specifically to address changing and often unmet needs of members. I like to think of these unique programs we develop as 'disruptive' lending."

Meriwest Credit Union of San Jose, Calif., is another institution that has developed a different roadmap for lending by partnering with Housing Endowment and Regional Trust, a nonprofit that helps moderate income families buy their first home in the challenging San Mateo County housing sector.

The credit union's "Opening Doors" homebuyer loan program combines a first mortgage up to 80% loan-to-value, with a second market rate loan, to facilitate a home purchase with a minimum 5% down payment. The program reduces homeowners' monthly payments and does not require them to buy private mortgage insurance for the loan, which saves thousands of dollars in annual mortgage insurance premiums.

"Our lending program with HEART allows first-time home buyers to put 150% of their median income toward a monthly payment," Daniel Hapner, director of mortgage sales at Meriwest Credit Union, said. "First-time home buyers need programs like this that allow them to make a greater down payment on a house because oftentimes, 20% isn't enough to constitute a strong buyer in this competitive environment. If you want to be a strong buyer in this county, you're looking at a 30 to 50% down payment because the available real estate is so scarce."

According to Lytle, "It's not our mission to say no; it's our mission to help educate our members on how to build personal finances to make them an attractive borrower. We take the time to get to know them, hear their story and find ways to provide the financial flexibility needed to purchase a home. In turn, when a member can convert rent into a home purchase payment this actually helps them stabilize housing costs and build wealth."

For first-time home buyers, here are some tips credit unions can make known to members, based on the experience of Lytle and Hapner:

1. Get pre-approved and do your research. "An informed buyer is an empowered buyer," Lytle said. "Being pre-approved will save you a lot of time and minimize the chances of being misled into buying a house you can't afford. You can get pre-approved online for free in under 20 minutes."

2. Buy the house. "Don't get scared off from purchasing a home or tricked into the 'forever a renter' mentality," Hapner said. "Buying a house is a solid investment in your future and may be the best investment you make in your entire financial portfolio. It can even make you money in the long run."

Credit unions are game changers in the home lending market, not only for first-time home buyers, but all members. As not-for-profit institutions, the movement is better positioned than any other type of lender to help put their members on a lifetime path to achieving their financial goals.

Bill Prichard is senior manager, public relations and corporate communications for CO-OP Financial Services. He can be reached at 800-782-9042 ext. 3450 or [email protected].