Local Credit Unions Join Nationwide Billion-Dollar Home Loan Program to Assist Lower-Income Borrowers.

SAN FRANCISCO -- Focusing on helping lower-income borrowers afford their first home Patelco Credit Union, Star One Credit Union and other Bay Area credit unions are taking part in a new $1 billion nationwide mortgage-lending initiative announced today.

These credit unions are among 61 across the country that are now offering a new mortgage product, called Home Loan Payment Relief (HLPR, pronounced "helper"), aimed at borrowers with household incomes at or below the median in their market. Together participating credit unions have committed nearly $1 billion to the HLPR program, a level expected to rise to $2 billion-to-5 billion as credit union participation grows.

Rick Heldebrant, Star One Credit Union's CEO commented, "A key part of our mission is helping people of modest means within our membership, many of whom have found themselves frozen out of the housing market because of rising home prices and monthly payments. We can't produce more affordable housing, but with HLPR we can reduce their monthly payments so more borrowers can qualify."

Basics of the program include:

--The HLPR loan is a three-year adjustable-rate mortgage that will be offered to qualifying borrowers at one percent below the national average for these loans. Based on current market rates, the HLPR mortgage will be offered at app. 4.5%.

--Patelco, Star One and other participating credit unions are bearing the cost so that the loans can be offered at this more affordable rate as part of their commitment to serving people of modest means.

--The required down payment will be no more than 3 percent, and gifts or grants are permitted. After three years, the rate will adjust annually to market rates, with rate adjustments capped at 1% a year and 5% over the life of the loan.

--The loan is available to borrowers whose household income is either at or below the area median income, with additional eligibility for those in "high cost"-designated areas, such as Santa Clara County, San Francisco County, and virtually all Bay Area communities.

--The HLPR mortgage will benefit qualifying borrowers in several ways: through lower monthly payments; by qualifying for a larger mortgage; or by lowering the income level needed for a given mortgage.

Andrew Hunter, CEO of Patelco Credit Union said, "Credit unions are about 'people helping people' from all walks of life. With this new HLPR loan, we're giving our lower-income members a greater opportunity to purchase a home and begin to build wealth as the equity in their home accumulates."