LA CROSSE, Wis. (9/17/15)--A handful of credit unions in the La Crosse, Wis., area have joined a coalition of financial institutions to provide loans to individuals hoping to secure financing to build or renovate their homes because, if they do, the individuals can earn college scholarship money for their children.
Through La Crosse Promise, anyone who invests in their homes in the city’s Powell, Poage, Hamilton, and Washburn neighborhoods can receive up to $50,000 in college scholarship money (WKBT-TV Sept. 16).
Families in these areas typically have difficulty securing loans. To ensure families who would benefit from the program the most receive the financing they need, 10 financial institutions have banded together to form the Powell, Poage, Hamilton and Washburn Neighborhood lenders consortium.
Jack Peplinski, Altra FCU president/CEO, told WKBT-TV that everybody wins when a neighborhood improves.
Each lender in the consortium has agreed to accept higher loan-to-value ratios than normal when making loans to approved applicants.
This will come in handy for borrowers who have to take out a huge loan and then also have to pay mortgage insurance, according to Peplinski.
If the loan is for more than 80% of the value of the home, a secondary mortgage market would require mortgage insurance, Peplinski told WKBT-TV. But the 10 financial institutions will keep all loans in house, the TV station reported, allowing them to set any terms they would like.
The consortium has pledged $8 million in available mortgages for families interested in the program. While each financial institution may vary in construction financing rates, the loans will only carry 15-, 20-, or 30-year fixed rates.