achieving sustainability, scale and impact in community development finance: strategic...

Achieving Sustainability, Scale Achieving Sustainability, Scale and Impact in Community and Impact in Community

Development Finance:Development Finance: Strategic Collaborations for SuccessStrategic Collaborations for Success

Presented ByPresented By

Larry GarciaLarry GarciaOct 10, 2006Oct 10, 2006

El Paso Credit Union Affordable HousingCredit Union Service Organization

4707 Montana Ave. Ste 202. El Paso, TX 79903

[email protected]

915-838-9608 fax 915-838-8085

El Paso Affordable Housing El Paso Affordable Housing Credit Union Service OrganizationCredit Union Service Organization

FORMED BY 8 CREDIT UNIONS IN LATE 2001,

EL PASO AFFORDABLE HOUSING CUSO IS A CREDIT UNION MOVEMENT INITIATIVE TO IMPROVE THE ECONOMIC & SOCIAL WELL-BEING, AND QUALITY OF LIFE OF THE COMMUNITY BY PROMOTING FINANCIAL EDUCATION, SAVINGS, CREDIT WORTHINESS, AND PROVIDING ACCESS TO CAPITAL.

AHCUSO Partner OwnersAHCUSO Partner Owners• El Paso Area Teachers FCU

• El Paso Employees FCU

• One Source FCU

• First Light FCU

• West Texas Credit Union

• GECU

• Golden Key FCU

• Mountain Star FCU

Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization Model Credit Union Service Organization Model

• Credit Unions partner to establish Affordable Housing Credit Union Service Organization.

• CUSO delivers Bilingual Financial Literacy & Homeownership Workshops as outreach and are used to develop market profile and variances to conventional mortgage products needed to service the market.

• CUSO identifies non-profit or housing community organizations with which to partner and jointly leverage their resources for home mortgage program that will service the community.

Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model

• CUSO partners with GSE (Fannie Mae) for experimental product based on CUSO and partner resources and variances developed from Homeownership workshop assessments.

• Fannie Mae provides technical assistance, materials, training, and software.


• Think Outside the Box—don’t be limited by traditional methods in marketing, promotion, & qualifying clients

• Develop different ways of verifying client information for loans

• Develop different ways of product delivery

• Be prepared for Long-term Commitment and Dedication

Lending Solutions based on Demographics andLending Solutions based on Demographics and Focus Group Findings Focus Group Findings


• CUSO holds Bi-lingual Financial Literacy & Homeownership Workshops and identifies potential homebuyers.

– Homebuyers identified as mortgage ready for conventional mortgages are referred to Credit Union Mortgage Dept.

– Others are enrolled in Mortgage readiness program and counseled in credit management and finance management.

– Buyers are referred to all available homeownership assistance programs and assisted with their qualification.

– Buyers are qualified for CUSO programs are provided with CUSO program loans.


• Credit Unions provide CUSO with Line of Credit to Fund Mortgage Loans

--And/Or-- Credit Unions provide guaranty to a Line of

Credit to CUSO from Southwest Corporate Federal Credit Union

• CUSO originates, closes, and funds mortgage

loans. Then packages and sells loans to Credit Unions or Seller-Servicer Credit Union for sale to Fannie Mae.


• Member Seller-Servicer Credit Union acts a conduit for CUSO and sells loan to Fannie Mae.

• CUSO collects payments from borrowers to monitor payment activity, and forwards payments to Seller-Servicer Credit Union.

• CUSO counsels borrowers before delinquencies occur, implements personal financial action plan.

• Credit Unions provide CUSO with management, in-kind resources, marketing, and warehouse line of credit.

PROGRAMS DEVELOPEDPROGRAMS DEVELOPEDFAMILY ASSET DEVELOPMENT PROGRAMS

• Bi-lingual Financial Literacy Workshops• Housing Counseling Program• El Paso Saves—bilingual Savings Promotion• Free Tax Preparation Program-EITC Coalition

NICHE MORTGAGE LOAN PRODUCTS

• EPEZ-AHCUSO Loan Program• HACEP-AHCUSO Loan Program (HOPE VI)• Lease Purchase Loan Program• Tornillo Colonia Loan Program (I & II)• San Elizario Colonia Loan Program• Section 8 Loan Program• City of El Paso HOME loan program• Sparks Colonia Home Loan Program

CUSO PARTNERSCUSO PARTNERS• EL PASO EMPOWERMENT ZONE

CORP• NATIONAL CREDIT UNION

FOUNDATION• TEXAS CREDIT UNION

FOUNDATION• EL PASO COLLABORATIVE• ALIANZA PARA EL DESARROLLO

COMUNITARIO• SPARKS HOUSING

DEVELOPMENT CORPORATION• HOUSING AUTHORITY OF THE

CITY OF EL PASO• CONSUMER FEDERATION OF

AMERICA• NATIONAL ENDOWMENT FOR

FINANCIAL EDUCATION• UTEP-CENTER FOR CIVID

ENGAGEMENT• HUD

• US DEPT OF TREASURY• FANNIE MAE• EL PASO COMMUNITY COLLEGE• HOUSING FINANCE CORPORATION• CITY OF EL PASO• THE CREDIT UNIONS OF EL PASO• TEXAS DEPT OF HOUSING &

COMMUNITY AFFAIRS• PROJECT HEAD START• VARIOUS SCHOOL DISTRICTS• VARIOUS EMPLOYERS• THE AMERICA SAVES CAMPAIGN• IRS• COALITION FOR FAMILY ECONIMIC

DEVPLOPMENT• UNITED CEREBRAL PALSY OF

TEXAS• NCRC

Results so farResults so far

• 3,600+ families counseled for housing & credit over the past 3 years

• Over 400 families placed in homes through CUSO program loans, Credit Union loans, or loans from other source.

• 9339 new savings accounts documented• 5055 participants to Financial Education

through 350 Homeownership Workshops• Enroll approx. 75 individuals per month


Credit Union Service Organization (CUSO)

Credit Unions

Foundations

Community Housing DevelopmentOrganizations (CHDOs)

Type of Partner Partner Role Partnership Outcome

Financial Literacy andHomeownership (FLHO) EducationAffordable Home Mortgage Loans Promote Savings & First Accounts

Initial Capital Technical AssistanceManagementWarehouse LoanConduit to Secondary MarketConsumer Financial Products

Grants, Technical Assistance,Networking

Outreach, Lend CredibilityHost site for FLHO workshopsPartner for CHDO grant programs

Develop & Deliver FLHO WorkshopsDeliver Housing CounselingExperimental Mortgage LoansCUSO Mgmt & Staff training & Support

Formed & Manage CUSO, Market CUSO Services to members, Access to Financial Consumer Products to underservedCUSO access to Secondary MarketsEstablish Servicing Portfolio from CUSO loans, Promote Savings to First Accounts & Youth Accounts

Startup seed grant for CUSO or CUSO programs, CUSO Mgmt & Staff training & support, In-kind assistance—legal, acctg,etc.

Promote CUSO within CHDO target communityImbed CUSO programs within their servicesLend Credibility to CUSO w/CHDO members


Public Organizations

Government

School Systems

Employers


OutreachHost SitePartner Public Housing Programs with CUSO programs CDBG funds/ Down Payment Asst.IDA Program match fundingCertifications/Designations Partner Gov’t Housing Programs with CUSO programsEITC programsOutreach Host site

Outreach, Host SitesTechnical Assistance, In-kind assistance

Outreach to employeesEmployer Assisted ProgramIDA Program match funding

Deliver FLHO WorkshopsDeliver Housing CounselingExperimental Mortgage LoansOutreach to Very Low Income families

Market CUSO Services through City Housing ProgramsProvide Down Payment Assistance & Principal reduction assistanceProvide Sites for FLHO workshopsInstitutionalize CUSO within Housing Prog.

Market Financial Literacy to Parents & HS StudentsProvide Sites for workshops

Market FLHO to employeesEAP to employees as “Golden Handcuff”Offer IDA match to Employee Savings


Faith Based Org.

GSE—Fannie Mae

Non-Profits Social Organizations


OutreachLend CUSO Credibility

Secondary MarketExperimental Mortgage ProductsGrantsTechnical Assistance

Outreach, Host SitesDown Payment AssistanceIDA Programs, In-kind assistance

Market FLHO to congregation

Develop Experimental Mortgage Products Provide Purchase commitments for loansProvide FLHO MaterialsProvide Resources & GrantsProvide Training to CUSO mgmt & Staff

Market CUSO to members or target marketProvide Down Payment Assistance & Provides Credibility to CUSOPartner with Non-Profit service programs

achieving sustainability, scale and impact in community development finance: strategic...

Documents

credit union mortgage

line of credit

credit management

credit worthiness

sellerservicer credit

paso affordable housing

cuso programs

cuso program loans