Since 1993, Landmark Credit Union in New Berlin, Wisconsin has been helping first-time home buyers by waiving closing costs. Members pay an application fee of $495 and save an estimated $595. About one-third of the total value of the organization’s mortgages is first-time buyers.

Another innovative program the $1.2 billion asset credit union employed in the past to help members caught in the subprime chaos was the Rescue Refinance program. Members were offered a five year adjustable rate mortgage that can’t increase more than 6% during the life of the loan.

“Wisconsin legal aid provided referrals. A Hmong family had good credit but had trouble understanding the loan documents,” said Ron Kase, CEO. “An additional family found the documents they reviewed were not the same at signing, including a $10,000 prepayment penalty.”

Federally chartered credit unions cannot charge prepayment penalties on mortgages, as a matter of law.

Landmark has also disbursed more than $10 million in HLPR loans since the program started in 2005 to low and moderate income members. The credit union has also offered 40-year mortgages to get payments as low as possible to get people into homes. But, less than 5% of the organization’s mortgage originations are in 40-year mortgages.

Real estate is a great opportunity, but credit unions need an outlet to sell their mortgages. They can’t keep all of their fixed rate mortgages on their books, said Kase. If they did, there would be asset liability mismatches.

“In July, I’ve noticed a slowdown because Fannie Mae and Freddie Mac have increased fees and rates,” he said. “Because of this, we’ve had to increase rates, 6.49% for a 30-year mortgage, up from a 5.9%. If somebody has lower quality credit, then it would be 50 basis points higher.”

It is good business to help low wealth folks get a mortgage, according to Kase. “Helping people get established by buying their first credit card or first house is a good idea; they will come back to the credit union to buy their second car or second house.”

Credit unions do have a decided advantage in the mortgage market for the near term. They have the trust of their members and potential members. Brokers and real estate agents are seeking reliable sources of funds that are hard to find. It’s a good time for credit unionists to get out of their offices and into the community to develop relationships with brokers, realtors, attorneys, developers—anyone connected with real estate.

As the credit unions profiled in this report indicate, there are creative ways to help your members realize the American dream of owning a home. And, most important, it is good business to help your members open the door to that new home.