by Broderick Perkins
(8/1/2012) - If these special credit union mortgages don't prompt
Washington, D.C. area mortgage borrowers to consider dumping their bank,
Houston, we have a problem.
The special home loans come from the NASA (National Aeronautics and Space
Administration) Federal Credit Union (NASA FCU). They are:
Zero down on a fully financed mortgage of up to $650,000 for your
Five percent down on a primary residence mortgage from $650,001 up to
Up to 95 percent cash-out refinancing for a mortgage of up to
$650,000 on a primary residence.
Up to 90 percent cash-out on a refinanced mortgage from $650,001 up
But here's the best part: There's no mortgage insurance for any of the loans and interest
rates start at the low 4 percent level.
There are a few catches.
Right now the credit union mortgages are only
available in the Washington, D.C. and surrounding Virginia and Maryland
Except for a 15-year fixed rate mortgage (FRM), the loans are
hybrid adjustable rate mortgages (ARMS), 3-, 5-, 7-, and 10-year ARMs, but
rates start in the low 4 percent rate.
"We currently aren't offering a 30-year fixed because we do have some
exposure. There are some trade offs, we have to protect our financial
stability, but these loans are not limited to the conforming level and
that's a big deal for those trying to find this kind of financing," said
Bill White vice president of residential lending at NASA FCU.
The special, limited-time mortgages are available from the
NASA FCU, but before your eyes go rolling up into orbit, you don't have to
be an astronaut to take advantage of them.
Kiplinger recently named NASA FCU one of the "7 Great Credit Unions
Anyone Can Join" for good reason.
Founded in 1949 by seven NASA employees to serve NASA employees, the credit
union has since expanded to serve members of a host of space science- and technology-related associations as
well about three dozen credit union affiliates.
If you don't know astronomy from aeronautics and can't find an in through
one of the 36 credit union affiliates, no worries.
NASA FCU's group of affiliate associations includes the American
Consumer Council, a non-profit group bent on consumer education,
advocacy and financial literacy. Council membership is free and once you
join, not only can you learn how to maintain the level of financial prowess
that can help you keep your home, you can join NASA FCU and take advantage
of the mortgage deals.
There are also no fees to join NASA FCU, but you do have to open a savings
account with an initial deposit of at least $5 to get a membership.
By the way, as a federally insured credit union, up to $250,000 of your
savings is federally insured and once your are in, NASA offers online
banking, access to more than 6,700 credit union service centers and more
than 28,000 surcharge-free automatic teller machines (ATMs), nationwide.
So how do they make such great loans?
Pretty much like any other credit union.
Credit unions don't bank like banks bank.
They are non-profits and non-profit fundamentals apply.
Credit unions take in deposits. They make loans. They
charge more on those loans than they pay on deposits. The recycle their
earnings to make more loans. Everybody wins.
Credit unions survived the housing crisis largely unscathed. Without the
profit motive they weren't lured by the get-rich-quick subprime mortgage
racket and generally didn't play the mortgage securities game. They hold
onto their own loans.
As a result, credit unions didn't need a bail out during the Great
Depression, they didn't need federal intervention during the Savings & Loan
debacle and they don¹t need government assistance now. And their
rates are often lower or comparable with banks.
Don't expect to be coddled when you apply for a mortgage. Just as credit
unions largely didn't offer toxic mortgages, they also steered clear of
those NINJA (no income, no job or assets) loans.
"There are a lot of variables. Just like any other loan product, there are
grids and you have to make sure everything fits. It's hard to dictate a rate
until we truly have the financial picture of the client," said White.
You'll have to qualify based on their underwriting standards, you'll have to
have the best credit to get the best rate, you'll have to prove your
employment, and you'll have to have adequate income-to-debt ratios, but if you past muster, you can
land one of the best no-mortgage insurance, low and no-down payment
NASA FCU says the "limited-time" period is TBA (to be announced). While
there is no current cutoff date, it could occur at any time NASA FCU deems
"We've had this loan out there for about a year and a half and we are not
near our maximum so we have haven't set a deadline because we don't know how
much is going to come in that we approve," White said.
Have a quickly verifiable mortgage deal like NASA FCU's special mortgages?
Contact, Broderick Perkins.
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