Creating a path to homeownership
Mortgage preparedness loan expands housing access in one of the world's priciest markets.
Buying a home in the Big Apple isn’t easy, but New York University (NYU) Federal Credit Union enables many members to achieve their dreams of homeownership.
Competing in the banking capital of the world is both a blessing and curse for Mira Ness and her staff.
“It’s hard and not so hard,” says Ness, president/CEO at the $71 million asset credit union. “Of course, there’s competition from virtually every major bank in the country, even the world. Just one block from our branch we have Chase Bank, TD Bank, Citibank, and Bank of America. It’s hard for our members to get services at affordable rates and fees. So we work with them and they trust us.”
Despite being associated with a globally recognized academic institution, NYU Federal members are predominantly blue-collar workers.
“Our member base is comprised of faculty, employees, staff, students, and alumni, but it’s important to highlight that we’re focused on serving low-income individuals,” Ness says. “A significant portion of our membership is from minority groups. Most of our members work as clerical staff, administrators, security officers, cleaning personal, and technicians.”
Securing a mortgage is a long and daunting process for most NYU Federal members.
“Owning property in New York City can be quite challenging due to the high prices, which are often driven up by foreign buyers investing money from around the world,” Ness says. “For our members with constrained earnings, buying property necessitates careful planning and disciplined saving. It’s vital for them to take the initiative and devise a solid strategy ahead of time.”
NYU Federal has two housing counselors, including Ness, who work with members to achieve their mortgage dreams. The credit union relies extensively on email for communication and marketing.
“We send out emails to our members telling them if they’re thinking about buying in the future, they have to think about how to arrange financing to put themselves on the right path,” says Ness. “We schedule appointments with them, mostly on Zoom.”
The process begins with a review of the member’s credit report, although Ness digs deeper into the member’s day-to-day financial picture. Her goal is to help members create a workable daily cash flow that will cover regular bills and pay off existing debt.
“Everybody’s financial picture is a little different,” Ness says. “Somebody will pay their mom’s phone bill their child’s rent each month. We put all that in a budget and work with them.”
The credit union created a mortgage preparedness loan to make that budgeting process more intentional and manageable.
“It’s an unsecured loan up to $50,000 that puts all of your outstanding expenses and debt into one payment,” says Ness. It also creates manageable cash flow that allows members to save for a down payment.
Plus, the credit union provides down payment assistance loans.
“If the member can save 10%, we’ll provide a loan for another 10% of the down payment,” Ness says. “This helps the member avoid having to pay private mortgage insurance. It’s another great way to help members who don’t earn high salaries.”
NYU Federal also works with the Federal Home Loan Bank of New York to provide grants to prospective home buyers.
Not all prospective homeowners are blue-collar workers. Ness shares how she worked with an NYU dean to secure a mortgage.
“She came to our annual meeting and told her story,” Ness says. “She said, ‘Because of my credit union I am finally a property owner.’”
Ness says there’s no secret to her success.
“You have to be committed to the credit union’s mission,” she says. “We’re here to serve our members. You have to know their needs and then prioritize the member experience.”