SC Telco Federal Credit Union has made more than 50 Habitat for Humanity loans since 2013.
The credit union is expanding its relationship with the housing organization to work with potential new homeowners and with other non-profit housing organizations.
Travis Barbare, Vice President of Lending, SC Telco FCU
SC Telco Federal Credit Union ($386.0M, Greenville, SC) participated in its first Habitat for Humanity home build in 2013, and the cooperative has built on its record of housing service in its hometown market ever since.
“We decided to take on a major community development project by committing to and building a home,” says Travis Barbare, vice president of lending at SC Telco. “It was a tremendous project supported by volunteers, staff, and members. That was the beginning of our relationship with Habitat.”
Today, the credit union provides volunteer labor and participates in Habitat leadership and fundraising efforts. It also lends money directly to the new homeowners.
The credit union currently holds 51 loans that originated through the Habitat relationship. Those loans comprise $2.7 million in a first mortgage portfolio of 1,070 loans totaling $122.0 million. Each note comes with an upfront loan discount credit from Habitat to the lender that the credit union treats as pre-paid interest income.
For example, on a $100,000 loan, Habitat takes $80,000 and sends the remaining $20,000 back to SC Telco as the credit. The homeowner then gets a 100% loan-to-value mortgage at 0% for 30 years.
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Habitat guarantees the loan. The homeowners, meanwhile, pay back the note, but not before contributing sweat equity and participating in financial counseling and budgeting classes that SC Telco offers in conjunction with other area financial institutions.
“The loans have performed very well; there’s been no delinquency,” Barbare says of the Habitat home mortgages it holds. “Habitat does a good job with the counseling and budgeting classes. It also does a good job of continuing the relationship with the homeowners.”
The performance SC Telco’s Habitat portfolio has heled the credit union notch loan income of $9.7 million so far in 2019 and post an overall first mortgage delinquency rate of 0.45% in the second quarter, compared with 0.52% for all 60 South Carolina-based credit unions and 0.62% for the 346 credit unions with $250 million to $500 million in assets nationwide.
But it’s not just about income for the Palmetto State cooperative.
“We see it as an opportunity to live our mission of improving the financial lives of our members,” says Barbare, a 10-year employee of the credit union who took the lending helm in 2017.
Some of those members that started with a Habitat loan have established checking accounts, taken out car loans, and participated in the credit union’s Save to Win program — the savings-based lottery program for which SC Telco was the first in the state to participate.
“We make the first $25 deposit to get them started,” says Barbare of the Habitat borrowers who take the credit union up on the Save to Win offer. “It’s just another way to expand our relationship with them.”
SC Telco FCU's Work With Habitat for Humanity
SC Telco President and CEO Steve Harkins and the enterprising new owners of a Habitat home share the podium at the ceremony marking the house’s completion.
It was a happy gathering on the front porch of a new home in Greenville, SC, for the local Habitat for Humanity chapter, SC Telco officials, and the new homeowners.
Although SC Telco has branches in four counties — three of them in upstate South Carolina and one to the south in the state capital of Columbia — it has concentrated its Habitat work in its home county of Greenville, a fast-growing area with a dynamic economy at the base of the Blue Ridge Mountains.
“SC Telco is headquartered in Greenville, and there’s a tremendous need for affordable housing in our community,” Barbare says.
In addition to providing manpower and home loans, the credit union’s work with Habitat also includes some commercial lending, participation in the international organization’s local CEO Build program, and two annual fundraisers.
And last year, SC Telco expanded its Habitat work to include working with potential new homeowners through the county chapter’s Homeward Bound program. Andrea Finley — the credit union’s financial wellness coordinator — participates in budget reviews, helps create savings plans, and brainstorms with participants who currently don’t qualify for Habitat ownership.
“We’re excited to expand our partnership with SC Telco,” says Elizabeth Bagley, family services coordinator for Habitat for Humanity of Greenville County. “We hope our homeownership program participants and Homeward Bound program participants will be more prepared for homeownership and on a path towards achieving their long-term financial goals.”
That’s what the credit union hopes for, too, as improving the lives of new and future homeowners in Greenville County becomes part of the fabric of service at SC Telco. In fact, the cooperative has a relationship with another non-profit, Homes of Hope, that provides affordable rental housing in Greenville.
“We’ve had success partnering with non-profit organizations that also have a heart for serving people and the community,” Barbare says. “Together, we support the credit union philosophy of ‘people helping people.’”