CAPITOLA, Calif.–As part of its commitment to champion affordable housing locally, Bay Federal Credit Union has pledged $1.5 million in low-interest financing for families in the Habitat for Humanity Monterey Bay program.
Up until now, Habitat Monterey Bay has carried and serviced all the loans for its homes. Going forward, Bay Federal said its financial support will enable Habitat Monterey Bay to serve even more families as it looks to expand its portfolio of affordable homes by 30% over the next five years. With volunteer labor and often-discounted property, $1.5 million will translate into approximately five new dwellings.
“Bay Federal is committed to this community and committed to advocating for affordable housing,” said Carrie Birkhofer, president and CEO of Bay Federal. “We’ve worked with Habitat for many years, and we were in a unique position to help. I’m confident that this partnership will make a real financial difference in the lives of local families.”
While Bay Federal has worked with Habitat Monterey Bay in the past to provide families with counseling from a certified financial educator ahead of their home purchase, this is Habitat Monterey Bay’s first partnership for third-party financing, the credit union said. Third-party financing is a proven model at other Habitat for Humanity organizations across the nation, in which families take out loans at below-market interest rates with established lenders instead of carrying zero-interest mortgages through Habitat for Humanity, it added.
“Historically, Habitat for Humanity Monterey Bay has been building and financing two homes a year,” said David Foster, Executive Director of Habitat Monterey Bay. “Bay Federal Credit Union’s mortgage assistance enables Habitat to increase affordable housing production. This is what community partnerships are all about.”
The Kirbys in Live Oak were the first Habitat Monterey Bay family to secure funds for their new home through Bay Federal. They moved in on after fulfilling their sweat equity commitment (an investment of unpaid labor) and undergoing training on personal finance and maintenance for homeowners, among other requirements.