Inclusiv/Mortgage Expands Services, Partnerships and Operations to Meet Unprecedented Demand
Expanding access to homeownership is a key component of the Inclusiv mission of financial inclusion. Launched in 2005, Inclusiv/Mortgage established a secondary market outlet for member credit unions with a focus on and moderate-income members. Over the years, demand has grown significantly with a portfolio now comprised of $20 million in affordable home mortgages originated by 30 community development credit unions (CDCUs) nationwide as of January 2022. As a result of this growth, Inclusiv/Mortgage is pleased to announce expansion in several areas: higher LTV ITIN lending, a third-party origination partnership, a pilot launch of operations in Puerto Rico, and the approval of more than 54% of otherwise declined home loans through the Second-Look Program.
Inclusiv/Mortgage Offers ITIN 90% Loan-to-Value Option
Inclusiv/Mortgage will now offer approved sellers an outlet for up to 90% loan-to-values on ITIN mortgage loans. Historically, lenders have limited financing to no more than 80% of the homes loan-to-value due to the inherent risk of extending credit to ITIN holders. Despite the overall positive performance of ITIN loans, the secondary market has been slow to adjust risk exposure accordingly.
"We believe this change in loan-to-values will provide CDCUs an option to help more ITIN borrowers qualify for home loan financing, especially in the current home market where increased prices and low inventory make it difficult for solid borrowers to compete without it," said Eben Sheaffer, Inclusiv's Chief Financial Officer.
Expanding Services Through Strategic Partnerships
Credit unions that want to provide affordable home loans to members but are hindered by obstacles that seem insurmountable can now take advantage of a third-party origination partnership powered by the Credit Union Mortgage Association (CUMA). Whether it is the need to offer mortgage loans, complement existing staff, or stay abreast of the litany of complex regulatory compliance – this is where third-party originations can help.
"Leveraging the expertise of CUMA backed by our secondary market allows you to grow your mortgage lending volume and reduce or eliminate repurchase and interest rate risk," said Ahmed Campbell, Inclusiv’s Director of Lending Development. Inclusiv/Mortgage and CUMA will customize an affordable solution for processing, underwriting, closing, and servicing, freeing up credit unions to focus on member service.
Puerto Rico Pilot Launch
At its recent Annual Conference in San Juan, Inclusiv was excited to announce efforts to expand Inclusiv/Mortgage operations to cooperativa members in Puerto Rico. Currently, there are 106 cooperativas on the island, 85 of which are Inclusiv members. These members have experienced limited access to secondary mortgage markets and restrictions on retained loan servicing. Inclusiv/Mortgage is piloting a secondary market program with five cooperativas who have committed to this ground-breaking initiative.
"Strengthening Puerto Rico's network of financial cooperatives is a proven and effective mechanism to support the economic revitalization of vulnerable communities and help them expand homeownership," said René A. Vargas Martínez, Inclusiv's Director of the Puerto Network.
More Credit Unions Say "Yes"
Inclusiv/Mortgage has also been at the forefront of helping CDCUs turn member declinations into approved loans through the Second-Look Program. Since its launch in the summer of 2021, the Second-Look Program has resulted in the approval of more than 54% of otherwise declined home loans from the CDCUs actively participating in the initiative.
"These are loans that would have been turned down based on credit union’s standard underwriting guidelines as well as automated decisions from Fannie Mae Desktop Underwriter and Freddie Mac Loan Prospector. Inclusiv was able to help these applicants achieve homeownership," said Bob Mundy, Director of Inclusiv/Mortgage.
Launched in 2005, Inclusiv/Mortgage established a secondary market for member credit unions’ mortgage loans to low- and moderate-income members. As of January 2022, Inclusiv's mortgage portfolio is comprised of $20 million in affordable home mortgages originated by 30 community development credit unions across the country.
Inclusiv/Mortgage is a Secondary Market Program that purchases conforming and non-conforming affordable first-lien mortgage loans from our member credit unions who are approved to sell loans to Inclusiv. By creating a pipeline for CDCUs to sell their mortgages, Inclusiv/Mortgage replenishes credit unions’ capital, reduces rate risk & enabling CDCUs to magnify their impact in their communities. Inclusiv/Mortgage helps CDCUs recycle capital in their communities, freeing up funds for additional lending. In 2016, Inclusiv/Mortgage launched a new initiative to dramatically increase the volume of loans purchased, providing an alternative to the predatory practices targeted at the minority, immigrant and low-income communities across the country, enabling our member credit unions to provide quality residential mortgage services to the communities they serve.
At Inclusiv, we believe that true financial inclusion and empowerment is a fundamental right. We dedicate ourselves to closing the gaps and removing barriers to financial opportunities for people living in distressed and underserved communities. Inclusiv is a certified CDFI intermediary that transforms local progress into lasting national change. We provide capital, make connections, build capacity, develop innovative products and services and advocate for our member community development credit unions (CDCUs). Inclusiv members serve over 17 million residents of low-income urban, rural and reservation-based communities across the US and hold over $244 billion in community-controlled assets. Founded in 1974, Inclusiv is headquartered in New York, NY, with offices in Madison, WI, Atlanta, GA and Albuquerque, NM. For more information about Inclusiv.org and connect with us on Facebook, LinkedIn and Twitter.