NE CUs tailor FHLB Boston equity builder program for homebuyers

March 25, 2016

BOSTON (3/2516)--Nearly 30 credit unions have been approved by the Federal Home Loan Bank (FHLB) Boston to participate in the 2016 Equity Builder Program (EBP).

The program offers grants to eligible financial institutions to provide households with incomes at or below 80% of the area median income with down payment, closing cost, homebuyer counseling and rehabilitation assistance. Members can also use EBP grants to match eligible buyers' savings under an individual development account-type program.

Homefield CU, North Grafton, Mass., was approved for the second year in a row. It received $150,000 that can be disbursed to qualifying members up to $15,000.

"We operate in a diverse economic community, and there are many income-qualified people who just need a little help in buying a home. By being an approved institution with the Federal Home Loan Bank's program, we can now provide the help they need,” said Lloyd Hamm, president/CEO of Homefield CU (Daily CU Scan March 23). “We know that while the immediate impact will be on the new homeowners, the community will also benefit by the increased home ownership and all the positive aspects that placing permanent roots in the community brings.”

In Somerville, Mass., Naveo CU will offer grants of up to $11,000 to eligible buyers through EBP and separately will pay for the first $350 toward a property appraisal. The credit union also has been hosting monthly first-time homebuyer workshops.

“The Equity Builder Program, combined with the $350 appraisal credit and today’s historically low interest rates, will enable many prospective home buyers to make the jump from renting to owning their own homes,” said Naveo CU Vice President of Lending Albert Pinho.

Maine Savings FCU, Hampden, is the first and currently only credit union in Maine to offer the EBP with grants of up to $15,000. “Rents are increasing and the dream of home-ownership seems out of reach for many. But this program will help bridge the gap for some who are close to being able to buy a home, but who may need a little extra assistance to get there,” said President/CEO John Reed. “We take very seriously our role in helping members of our communities achieve the goal of home ownership.”

Recipients must attend a home-buyer education and counseling program. EBP funds may be eligible to be combined with other loan programs, including Maine Savings FCU’s 10% down-payment CU Promise loan.

The Credit Union National Association firmly believes in credit union access to the FHLB system, which offers liquidity and flexibility to manage mortgage portfolios more effectively. It has supported H.R. 2473, introduced by Reps. William Lacy Clay (D-Mo.) and Randy Neugebauer (R-Texas), which would amend the Federal Home Loan Bank Act. The bill would ensure the eligibility requirements for similarly sized credit unions and banks are the same by including credit unions in the act's definition of "community financial institution."