Real estate loan balances outstanding at credit unions increased 9.5% year-over-year to reach $456.6 billion as of June 30, 2017. First mortgages accounted for $375.7 billion of those balances outstanding and represented 82.3% of the credit union real estate lending portfolio.

Although credit unions posted growth in all first mortgage lending products, the greatest year-over-year expansion, 13.6%, occurred in balloon/hybrid mortgage loans.

As of mid-year, 26.9% of all first mortgage loans on the industry’s balance sheet were balloon/hybrid. Fixed-rate first mortgage balances increased 10.0% annually to $218.3 billion and accounted for 58.1% of all first mortgage loans. ContentMiddleAd

The average first mortgage origination balance has increased every year for the past six years: from $154,103 in second quarter 2011 to $196,609 in second quarter 2017. That’s an increase of more than $40,000.

Credit unions in the NCUA’s Western region led the industry with an average first mortgage balance of $267,936. That’s almost $50,000 more than the Mid-Atlantic region, which came in at No. 2 with an average of $219,305.

Year-to-date first mortgage sales to the secondary market dropped to $22.8 billion. That’s a 3.6% decline since June 30, 2016. As a percentage of first mortgage originations, sales to the secondary market also declined. Credit unions sold 33.8% of first mortgage originations as of June 30. That’s down 3.8 percentage points from June 30, 2015, and down 18 percentage points from June 30, 2013. Credit unions with more than $1 billion in assets sold 35.8% of their first mortgage originations. By comparison, credit unions with $20 million or less in assets sold only 11.5%.

First mortgage delinquency improved across the industry. The industry’s second quarter average of 0.56% is a 9-basis-point decrease since the second quarter of 2016. First mortgage charge-offs also improved, falling 2 basis points year-over-year to 0.03%.

Click through the tabs below to see the top 10 credit unions in each leader table.

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See the rest of these tables and explore dozens more along with hundreds of pages of credit union performance data in the 2018 Callahan Credit Union Directory. It’s the gold standard for reliable insight. Read the digital download today.

CASE STUDY

Making Mortgages In High-Priced Markets

New York University FCU | New York, NY | Assets: $22.2M | Members: 5,395

San Mateo Credit Union | Redwood City, CA | Assets: $975.7M | Members: 88,143

New York University Federal Credit Union and San Mateo Credit Union have found ways to help members buy homes in two of the nation’s priciest markets.

NYUFCU and SMCU both use homeowner education, flexible but responsible terms, and down payment assistance as tools to help members looking at more mortgage than salary as they try to find homes in the Big Apple and Silicon Valley.

NYUFCU has made loans up to $3 million, according to chief executive Mira Ness. And the credit union recently financed $2 million for a 1,000-square-foot condo that went for $3.18 million in the Lower East Side. Ness says the credit union never finances less than $150,000. More typical transactions are like the $250,000 one-bedroom apartment the credit union just financed in the Bronx.

NYUFCU requires a 10% down payment for a home loan. To help potential borrowers get there, the credit union participates in a first-time homebuyer program with the Federal Home Loan Bank. The class meets for six hours and covers the basics. In return, participants who can save $1,900 over one year receive a match that brings the total up to $8,000.

Across the country, SMCU’s membership includes approximately 6,300 employees of San Mateo County, the credit union’s original SEG. These members can enter a lottery to win a $100,000 down payment structured as a 35-year second mortgage, with the first five years coming with no payments required and then amortized at 3% beginning in year six.

Funded by the county, the second mortgage adds approximately $600 a month to the house payment, and recipients must be pre-qualified. Forty-four entered the April 2017 drawing, says SMCU president and CEO Wade Painter, and the first name drawn for the $100,000 second note was an employee of the county sheriff’s department.

The average house price for the San Mateo market is $1 million to $1.5 million, Painter says. That makes for a narrow selection for the county’s would-be homeowning employees.

We try to make it as affordable as we can, Painter says. The hard part is finding a house they can afford.

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