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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
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.
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
• 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
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
• 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.
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
• 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.
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
• 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
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
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
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
Public Organizations
Government
School Systems
Employers
Type of Partner Partner Role Partnership Outcome
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
Strategic Collaborations for Success: A Strategic Collaborations for Success: A Credit Union Service Organization ModelCredit Union Service Organization Model
Faith Based Org.
GSE—Fannie Mae
Non-Profits Social Organizations
Type of Partner Partner Role Partnership Outcome
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