Hope FCU Wins Grant for Low-Income Housing

Hope Federal Credit Union of Jackson, Miss., has won a $3.7 million federal grant that will allow it to support low-income housing in the Mississippi Delta.

The U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund announced Wednesday that Hope FCU ($295.9 million in assets, 47,967 members) and 37 other institutions were awarded $142.9 million in grants for this fiscal year through its Capital Magnet Fund.

The 38 awardees serve 39 states, plus Washington, D.C., and Puerto Rico. They were among 116 organizations that applied for the grants.

The fund supports financing to developers or purchasers of housing for low-income families. Some of the funds can also be used for day care centers, workforce development centers and health care clinics.

Awardees can apply the funds to support loan loss reserves, loan funds, risk-sharing loans, and loan guarantees for projects with aggregate costs that are at least 10 times the size of the award.

Hope FCU, which expanded into Alabama in 2017, won a $2.5 million award last year that it used to support the construction of 412 low-income housing units in that state with a total investment of about $14.8 million. The units, which often include single-family homes, must remain rental units for at least 15 years.

Phil Eide, Hope FCU’s SVP for community and economic development, said he expects this year’s grant will support about 600 units, with a significant number in Alabama.

In the two years ending Dec. 31, Hope FCU’s membership grew 41%, with a net gain of 13,888 members in Alabama, Arkansas, Louisiana, Mississippi and Tennessee.

About a third of its new members are unbanked when they join Hope FCU, and another 25% are underbanked, depending on payday loans, or other high-cost or predatory lenders. About 80% of its members are minorities, and half have household incomes of less than $35,000 per year.

The grants complement Hope FCU’s mission because they support housing for families earning 60% or less of the median income in their area.

“These are the members we’re looking for. These are the folks who live in these units, who we want to help,” Eide said.

When developments are near a branch, Hope FCU is often successful in drawing the residents to become members. Sometimes credit union employees visit the communities on a quarterly basis to talk about ways they can affordably buy a house or borrow for a car, or how to avoid payday loans.

“We go into the development, and let tenants know Hope is available,” Eide said.

Hope FCU is one of the NCUA’s Low-Income Designated credit unions with more than half of its members having low incomes. It is also a member of Inclusiv, formerly called the National Federation of Community Development Credit Unions.