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Affordable Housing
An MDI in the Southwest worked with a local housing non-profit to prevent a member from falling into homelessness. The credit union provided a mortgage loan when the member's home purchase was on the verge of falling through.
The member sold their mobile home and was expecting to close on a new home, having gotten approval for a loan from a mortgage company. However, the approval was rescinded, despite the member’s good credit history, because the member held an individual taxpayer identification number, which is issued by the federal government to people who need a taxpayer ID but lack a Social Security number.
The credit union's mortgage department took an application right away, contacting other parties involved to gain time to process the loan and arrange an extension of the mobile home sale.
Expanding Safe, Fair and Affordable Access
A small MDI in South Carolina analyzed its potential membership and discovered a largely Hispanic underserved area that it made a significant effort to reach.
The credit union first created Spanish versions of applications, loan documents, and disclosures. It then began the design and construction of a full-service branch in that community, staffed with bilingual employees. By providing easily reachable services to a population that was not used to having them, the credit union’s actions reflect its commitment to provide members a safe place to deposit their money and fair and affordable loan products, important elements to developing and maintaining financial security.
Addressing Basic Needs
A Texas MDI serving an area where a quarter of the residents live at or below the poverty line took particular notice of the fact that low-income members had difficulty purchasing reliable vehicles. Prices were rising while incomes were not. Downpayments, along with taxes and the costs of titles and licenses, created obstacles to ownership. Sub-prime lenders were typically charging 25 percent interest, and monthly payments often led to defaults. So, the credit union created a first-time buyers downpayment assistance program that provides loans to match downpayments up to $2,500.
Providing Consumer Education
A New Jersey MDI serves a low-income, 85-percent-minority population with limited access to financial services. One need is housing, and one barrier to obtaining homeownership is a lack of financial management skills. More than three-quarters of residents rent, though some had the financial capacity to purchase a home. The MDI created a financial counseling program to teach members about household budgeting, financial management, overcoming debt, credit reports, and the steps involved in obtaining a mortgage.
Once a session is completed, one of the credit union’s counselors works with the member to apply the lessons learned, including coming up with an action plan. The credit union continually monitors the program to find ways to make it more effective. Data shows about one-quarter of members receiving counseling improved their financial situation—such as building savings and reducing debt—and about one in five members who participate in the sessions are eventually approved for a mortgage.