The Credit Union National Association (CUNA) Senior Director of Advocacy and Council Elizabeth Sullivan recently spoke at the Federal Housing Finance Agency (FHFA) and Government National Mortgage Association (GNMA, also Ginnie Mae) listening session. The discussion centered on the re-proposed eligibility requirements for both agencies.
Sullivan discusses opportunities for the agencies to reduce operational burden on credit unions participating in federal housing-related programs in support of the missions of both agencies to support access to affordable housing, according to a CUNA release.
“Credit unions are fulfilling their mission to meet the needs of those in their communities,” Sullivan said in the release. “More than 50 percent of credit unions focus on serving low-income individuals, while 70 percent of credit union branches are in middle, moderate, and low-income communities with 35 percent of credit unions being in CDFI investment areas.
“Credit unions originated more than 2 million mortgages last year. More than half of credit union-originated home loans go to borrowers earning middle income or less,” she added. “The average size of a credit union first mortgage in 2021 was $180,534, significantly smaller than the national average mortgage of $453,000.”
Sullivan noted requirements affecting credit unions, particularly around capital requirements, should be informed by the requirements of the National Credit Union Administration because of their capability to understand the unique needs and abilities of credit unions.
While the GSEs and GNMA should establish eligibility requirements that protect American taxpayers and federal programs from counterparty risk, they must also understand that the risk by credit unions is far less compared to non-depository mortgage lending entities, CUNA stated.
While the FHFA’s proposal appears to have no significant effect on credit union eligibility, CUNA’s research indicates that GNMA’s capital requirements proposal would, as written, prevent nearly 24 percent of credit unions from becoming GNMA issuers.