For the first time anywhere, a group of credit unions has joined a local affordable housing program by promising to make $14-million in low-cost home improvement loans through Tampa's Mayor's Challenge Fund.
"There's a lot of other programs, but nothing as extensive as this," said Fernando Noriega, the city's director of Housing Development and Coordination. "We're going to set the standards for credit unions to become involved in affordable housing."
City officials formally announced the credit unions' commitment Tuesday during a Tampa Housing Partnership breakfast at the Tampa Convention Center.
After the breakfast, officials called the credit unions' involvement a key to making programs such as the Challenge Fund, which uses public funds to provide partial guarantees for private home loans, more permanent and far-reaching.
"I think it's a whole new dimension," Mayor Sandy Freedman said. "It's a whole new resource that we've just begun to tap."
Freedman said the credit unions' involvement in the Challenge Fund may extend the fund's reach to "tens of thousands" of people.
"The philosophy behind all credits unions is people helping people," said Edward Gallagly, president of the Florida Central Credit Union. "My thought was, "Here's an opportunity for credit unions to step up to the plate and address this issue on their own.'
Along with the Florida Central Credit Union, the group includes the GTE Federal Credit Union, Railroad & Industrial Federal Credit Union, Suncoast Schools Credit Union, Tampa Bay Federal Credit Union and USF Federal Credit Union.
Freedman said the credit unions' "vast marketing" network may help educate people about the opportunity to borrow money to buy or rehabilitate a home through the Challenge Fund.
"Many people do not realize that they are candidates," she said. During the past seven years, 21 commercial banks had committed $50-million in loans to the fund.
Nationwide, credit unions, which are non-profit lenders, want to add members as profit-seeking businesses such as Western Union branch into services such as check-cashing. Such trends have convinced credit union managers that there are opportunities for them to expand their services.
"We would like to bring basic, lifeline financial services to people who might not otherwise have access to them," Gallagly said. "We feel that this is a role that credit unions could do and should be doing."