Wednesday, December 9, 2015 | 2:00 pm – 3:00 pm ET
IH Mississippi Valley is using Secondary Capital to launch their Reliable Rides program. Access to reliable transportation impacts income; it’s estimated that families can increase their income by as much as 25% with access to reliable transportation. When traditional financing is not available, low income individuals resort to Buy Here, Pay Here dealerships where interest rates can top 30%. High interest rates on poor quality vehicles create yet another trap for struggling consumers. Reliable Rides program will incorporate financial counseling, character-based underwriting and the leveraging of relationships with area car dealerships to create an inventory of low mileage, mechanically sound used cars.
Nearly 73 percent of those living below the poverty level rent, with the lack of affordable housing a significant hardship. Secondary capital will provide Freedom First with the additional liquidity and interest rate risk protection to support the continued growth of their affordable housing mortgage program. Through their Impact Banking program, Freedom First provides sustainable and effective financial products for low- and moderate-income members.
Suncoast’s First Time Homebuyer mortgage product allows for expanded underwriting criteria including allowing a lower credit score, higher loan-to-value ratio, and the use of alternative credit history rather than the requirements of a traditional, conforming mortgage. By offering this product, Suncoast will be able to provide a more affordable housing option for consumers and at the same time help strengthen the community.
About Secondary Capital
Secondary Capital is a subordinated loan that can be counted towards a credit union’s net worth and can be leveraged by growing CDCUs to expand safe and affordable lending to local communities.
The Federation offers two secondary capital loan products, Secondary Capital I and Secondary Capital II:
The Federation makes Secondary Capital I loans of up to $500,000 with maturities of 5-7 years and interest rates of between 5%-6%.
For qualifying credit unions, the Federation offers Secondary Capital II loans of up to $1 million with maturities of 5-7 years and interest rates of between 3.25%-3.75%.
All applications are on the Federation’s website, www.cdcu.coop. All credit unions may apply, but only Federation members in good standing may receive funding. Electronic submissions of completed applications are preferred; however, applications may be mailed to the Federation at 39 Broadway, Suite 2140, New York, NY 10006 or faxed to 212-809-3274. If you have questions about your application, please contact us at firstname.lastname@example.org or call Cathi Kim at 800-437-8711 or 212-809-1850, ext. 271.Only low-income designated credit unions may hold Secondary Capital loans. For more detail about Secondary Capital loans, please refer to NCUA regulations at:
http://www.ecfr.gov/cgi-bin/text-idx?SID=5edb9b65ca8989546e67011954311d55&mc=true&node=se12.7.701_134&rgn=div8Register for the Secondary Capital webinar to learn if a Secondary Capital loan from the Federation is right for you at
https://attendee.gotowebinar.com/register/5928874930878214401About the Community Development Investment Program
The CDI Program provides capital resources to its member CDCUs seeking funds to increase liquidity, boost net worth, mitigate risk and introduce innovative products. The CDI Program has invested more than $100 million in CDCUs since its inception in 1982.