A bill drafted by Rep. Scott Fitzgerald (R-Wis.) would raise the overall limit to 20 years and remove the “primary residence” restriction for mortgages, home equity lines of credit and other home loans. He sponsored a similar bill in 2021 during his first term in the House.

The new bill is supported by America’s Credit Unions (AmCU) and the Defense Credit Union Council (DCUC). They said a major use would be to allow a service member to get a 30-year mortgage to buy a second home where they plan to live after retiring. It would also allow 30-year loans for others buying second homes or rental properties.

“Hopefully credit unions will have parity closer to banks,” Carrie Hunt, AmCU’s chief advocacy officer, said.

Lifting the 15-year restriction also would allow longer terms for other types of loans, including small business loans, student loans and agricultural loans. Unlike the 2020 legislation that died, the new bill does not affect credit unions’ member business lending cap of 12.25% of their assets for small business loans.

The terms lenders extend on business and student loans can’t be checked by the public, but the public can see the terms on loans reported through the Home Mortgage Disclosure Act (HMDA).

And with home loans, a CU Times analysis found credit unions already have a lot of parity with banks.

CU Times compared first mortgages for home purchases originated by the 34 of the largest credit union producers with a few of the Top 10 bank producers.

About 90% of mortgages the credit unions originated in 2024 for homes that are not owner occupied carried terms exceeding 15 years.

Loans marked as not owner occupied with terms of 30 years or more accounted for 87% of loans and 90% of loan values for originations of first mortgages for home purchases.

Only 10% of the loans and 7% of their value carry terms of 15 years or less.

About 2% to 3% of loans carried terms between 15 and 30 years.

A member of Rep. Fitzgerald’s staff said the NCUA has interpreted the law to mean that a credit union can make a 30-year mortgage loan to a credit union member for a second residence if the credit union member can prove they intend to make the secondary residence their primary residence in the future.

“Proving that a credit union member intends to make a property their primary residence is a cumbersome process that adds additional regulatory burden on credit unions and their members, which deters credit union members from financing future primary residences through a credit union,” the staffer said. “This is especially true for military service members, who may want to purchase a retirement residence while they are still stationed and living elsewhere.”

AmCU provided several citations to NCUA legal opinions, including one issued in July 1992, that it said upheld that long-term mortgages on second homes being made by credit unions are lawful as long as the borrower intends to make it their permanent residence eventually.

The HMDA data also showed the 34 credit unions originated 3,817 non-owner-occupant first mortgages for home purchases, accounting for 4.4% of the number and 4.5% of the value of the loans.

Together, the 34 credit unions produced more loans in that narrow category than originated by Rocket Mortgage, the nation’s second-largest mortgage producer, Bank of America (No. 4) and Chase (No. 7).

At Rocket, non-owner-occupied homes were 2% of loans and amounts, and average amounts were similar to credit unions.

The average non-owner-occupied loan among the credit unions was $406,808, or about 2% more than owner-occupant loans. At Rocket, the average was $359,307, or about 3% less than the owner-occupant average.

At Bank of America, non-owner-occupied homes were 7% of loans and 10% of amounts. The average loan was $1 million, or 56% more than its owner-occupant average.

At Chase, non-owner-occupied homes were 4% of loans and 8% of amounts. The $1 million average was more than twice the average for its owner-occupant loans.

Contact Jim DuPlessis at [email protected].