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Government Loan Products Still Widely in Demand
Wednesday, June 21, 2017 6:25 AM

Despite the creation of several new home loan products offering lower down payments for borrowers, government mortgage products are still widely in demand by borrowers and by real estate agents. 

In 2016, CU Members Mortgage, and the credit unions they serve, provided more than 1,320 government loans (FHA, VA, USDA) with a total volume of $235,585,121. This shows that government loans are still a viable product for every credit union to provide to their members.

“To be an appealing competitor in the marketplace, credit unions must provide a wide-array of products for members,” said CU Members Mortgage Senior Vice President Linda Clampitt. “By reviewing the numbers from 2016, we can see that these products are still a big producer for credit unions and deserve a place on your product menu. Not only is the demand coming in from members, but we’re also seeing real estate agents specifically needing these types of loan products to close the deal with their buyers.”

FHA – Home loans provided with mortgage insurance by the Federal Housing Administration. These loans provide down payment options as low as 3.5 percent and accept minimum credit scores as low as 620. These loans are very helpful for credit unions to offer their members who are specifically reaching out to the underserved.

VA – These home loans are specifically for service members, veterans, and eligible surviving spouses. These loans have no down-payment options, require no mortgage insurance, and have other flexible terms. Offering this product allows your credit union to provide for the men and women who have bravely served our country.

USDA – These home loans were created by the United States Department of Agriculture and allow approved lenders to provide low- and moderate-income households the opportunity to own homes in eligible rural areas. These loans offer no down-payment options and other flexible terms for eligible buyers.

To provide government mortgage products can often be a burden for credit unions to originate on their own. Becoming a certified lender often requires a lengthy application process and a proven record of successful origination. However, working through an approved lender partner can make it possible for credit unions to still provide these vital products to their members. 

“We talk with more and more credit unions of all sizes on how they want to step it up and offer more to their members and compete in the marketplace,” said Clampitt. “What credit unions need to know is with government products they help more people reach their goals in affordable and sustainable ways, and they aren’t alone in offering these products. Experienced and successful aggregators are available to help them.” 

About CU Members Mortgage
Founded in 1982 as a division of Colonial Savings, a federally chartered thrift, Dallas-based CU Members Mortgage provides comprehensive mortgage services to credit unions and CUSOs nationwide. CU Members Mortgage originates more than $1 billion in FHA, VA, and conventional loans each year. With a portfolio of $25 billion, Colonial is one of the largest servicers of mortgage loans in the United States. The company is privately held and has offices located nationwide. For more information, visit www.cumembers.com.