CoVantage Credit Union, a not-for-profit, member-owned financial institution, has been awarded a $2 million grant from the U.S. Treasury’s Community Development Financial Institution Fund.
The purpose of the grant is to help people of modest means by providing funding to financial institutions in rural and low-income communities to be used specifically to offer affordable products and services to those who need assistance.
“Part of our mission at CoVantage is to help those having financial difficulty. We feel very fortunate to receive this grant that will help us continue to live out our mission,” said Brian Prunty, CoVantage Credit Union CEO.
Prunty said CoVantage is using the $2 million to create a down payment assistance program, called CoVantage Creates Homes. CoVantage will contribute an additional $13 million to supplement the program.
An informational session about the program will be held from 6-9 p.m. March 17 at CoVantage’s Shawano office, 911 E. Green Bay St. Guests need to RSVP to reserve a seat by calling 715-524-8200 or visiting the CoVantage office.
In addition to assisting with a home buyer’s down payment, CoVantage Creates Homes will also provide funding to make needed repairs to a home if it’s under distress or creating an unsafe living environment.
For those that already have a mortgage with CoVantage Credit Union, the program can be used solely for repairs to existing homes provided a licensed inspector deems them necessary.
CoVantage Creates Homes will offer home buyers an opportunity to borrow up to 90 price of the purchase price or appraised value, whichever is less, and features a low-rate fixed or adjustable rate mortgage (without requiring private mortgage insurance).
Additionally, the buyer may obtain a home improvement loan in the form of a second mortgage to complete any needed home repairs. There is no payment due and no interest charged unless the first mortgage is refinanced, the home is no longer the primary residence, or the home is sold.
To qualify for the program, borrowers must meet income limitations and other credit union lending criteria. Borrowers must also provide their own down payment of at least 3 percent plus closing costs, participate in a home buyer training, and obtain the necessary appraisals, inspections, estimates and/or escrows.
“With the CDFI funds, CoVantage Creates Homes can assist individuals and families who previously may not have qualified for a mortgage, and has the potential to help hundreds of people who otherwise may not have had the opportunity to own their own home,” Prunty said.
This is the second time that CoVantage has received a CDFI grant. In 2011, the credit union received a $1.5 million grant to aid families in danger of losing their home to foreclosure. CoVantage leveraged the $1.5 million grant with $10.5 million of its own funds to provide affordable loans for individuals struggling with mortgage debt. This resulted in more than 100 families who were able to keep their homes, according to Prunty.