WASHINGTON—The ways in which community development financial institutions (CDFI) and minority depository institutions (MDI) certified credit unions can help bolster access to affordable mortgage credit for low- and moderate-income and first-time homebuyers were the subject of discussions between NAFCU and Inclusiv and HUD Secretary Marcia Fudge.
Also discussed were issues related to appraisal bias and energy efficiency.
In addition to Fudge, Inclusiv and NAFCU, participants included President of Ginnie Mae Alanna McCargo and Principal Deputy Assistant Secretary for the Federal Housing Administration (FHA) Lopa Kolluri.
During the meeting, NAFCU and Inclusiv reported they urged HUD to conduct a study to determine the level of participation of CDFIs in FHA loan insurance programs and work collaboratively with CDFI and MDI credit unions to streamline the approval process for FHA lenders.
Suggestion Offered
Both groups also suggested that HUD consider an FHA lending focused pilot program for CDFIs and MDIs and allow the use of contract underwriters for FHA loans. Fudge expressed support for working together with credit unions and CDFIs to help bolster access to mortgage credit for underserved communities, NAFCU stated.
On appraisal bias, the group discussed the lack of standardization among appraisers and throughout the entire appraisal process, and its effects on borrowers. NAFCU called on HUD to promote consistency among appraisers and offer support for alternative appraisal processes such as appraisal bifurcation, desktop appraisals, and exterior only appraisals, which can help with flexibility, NAFCU stated.
Also Discussed
Other issues discussed included:
- The Biden Administration’s interagency task force, Property Appraisal and Valuation Equity’s (PAVE), action plan to tackle home appraisal bias as part of a larger effort to address the racial wealth gap, announced last month.
- How low- and moderate-income communities and communities of color tend to pay disproportionately high energy costs. NAFCU and Inclusiv urged HUD to consider offering an easy access national loan reserve fund for community development credit unions lending to underserved populations for clean energy and energy efficiency projects.
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