The late Luther Vandross was an American singer, songwriter, and record producer. His elegant, soulful style of music graced the musical airwaves with hits such as “Never Too Much,” “If This World Was Mine,” and “Here and Now” to name a few. But the most memorable song I remember is entitled, “A House Is Not A Home,” a 1960’s original song written by Burt Bacharach and Hal David and first performed by Dionne Warwick. It was later re-recorded by Vandross in 1981. In the first stance of the song, Vandross would serenade, “A chair is still a chair, even when there’s no one sittin’ there, But a chair is not a house and a house is not a home, when there’s no one there to hold you tight. And no one there you can kiss goodnight.” The lyrics are simple, yet they illustrate a profound truth about homeownership. That is, a house is a home when a family is there, loved ones are kissed goodnight, and parents hug their children tight. Conversely, a house is not a home unless a credit union is there to provide its members the financing needed with reasonable rates and friendly terms. Credit unions have a long history of turning houses into homes and have been there financially when other institutions have not.
A house when constructed is just that – a house. Whether a mansion in Beverly Hills, a newly renovated brownstone in Harlem’s Strivers Row, or an A frame house in Boise, Idaho, when unoccupied it is only a standing structure with a roof, walls, pipes, and other fixtures. Without a doubt, that house can become a home when a credit union is there to provide the mortgage. Credit union roots run deep in our communities of modest means because they are the stalwarts against the social injustices of anti-family redlining and predatory lending. It’s the credit union philosophy of “people helping people” that drives lower mortgage rates and access to credit to allow individuals to realize the American dream of homeownership. That said, the placement of families and individuals in homes is only part of what credit unions do. Staying in one’s home is also a priority. Typically, credit unions keep member mortgages in their portfolios and do not sell them onto the secondary mortgage market. So, when families experience financial hardships, they can count on their credit union to see them through challenging times. Many credit unions have developed coronavirus mortgage relief programs. For example, Desert Financial in the state of Arizona has provided struggling homeowners with a reprieve from their mortgage payments through forbearance and moratoriums on foreclosures. This is what makes credit unions different!
There are countless stories of credit unions assisting homeowners to achieve their goals. GreenState Credit Union of Iowa has recently committed one billion dollars over the next decade to help close their state’s racial homeownership gap (Credit Union Times, March 10, 2022). In California, Logix Federal Credit Union, just in April, rolled out a mortgage platform called “Mortgage Coach” to help members understand how various home financing strategies can best actualize their homeownership dreams and build wealth. Additionally, Redwood Credit Union announced a multi-million dollar partnership with Napa County to develop ADUs. ADUs or Accessory Dwelling Units are small residence buildings nicknamed “granny flats” built from the ground up by existing homeowners who desire to provide needed housing to those who may be unable to afford a market rate apartment, co-op, or condominium. This innovative ADU credit union loan product opens the door to existing homeowners of modest means to access capital they would not otherwise be able to obtain.
Although mortgage originations overall are forecasted to be down in 2022, the Mortgage Bankers Association has predicted home purchases will increase this year compared to 2021 and will continue to grow in 2023 and 2024 according to their April 2022 report. For future homeowners, the outlook is bright since homeownership is the key to building generational wealth and is the largest source of wealth among families. The National Association of Realtors (NAR) reported “A homeowner who purchased a typical home five years ago would have accumulated $146,200 in home equity, of which $125,300 would be from price appreciation of 86% of total home equity gains” (NAR, Metro Area Housing Wealth Gains). Unfortunately, NAR also noted “the U.S. homeownership rate experienced the largest annual increase on record, though Black homeownership remained lower than a decade ago (NAR, Racial Disparities in Homeownership Rates).” This fact makes the wealth gap between White and Black families more apparent.
That said, credit union financial inclusion is not just a grassroots bottom-up effort but should also flow from the top down. Fortunately, the National Credit Union Association (NCUA) has made financial inclusion a top priority. Current NCUA board member Rodney Hood when he was chairman back in 2020 announced that financial inclusion is the “civil rights issue of the 21st century.” He further stated, “There is a clear business case for credit unions to enhance their outreach to underserved and underbanked populations. The NCUA will dedicate resources from across its lines of business to bring more Americans into the financial mainstream and provide them with greater access to safe and affordable financial services” (NCUA, October 2020). Hood’s ACCESS initiative “through credit, education, stability, and support” is a big step forward to narrowing the wealth gap among minorities and the underserved through homeownership and financial equity.
Aligned with ACCESS, the African American Credit Union Coalition (AACUC) is also commended for its efforts in bringing diversity, equity, and inclusion to a financial cooperative industry that has embraced these important values as its 8th core principle. AACUC is actualizing its commitment to change via three signature programs: a “Commitment to Change Conversation Series,” the Diversity, Equity, and Inclusion Leadership Academy for Financial Professionals, and the “Financial Change Experience” credit card and pre-paid card that debuted this Spring 2022.
Yes, it is true a room is not a house, and a house is not necessarily a home. But whether you prefer Dionne Warwick or Luther Vandross, we can all agree that a house is not a home unless a credit union is there.