There’s No Place Like Home With A 12.5-Year Loan

One Idaho cooperative stands out in a rural market dominated by credit unions with a new package of home loans that serve educators and first responders.

Top-Level Takeaways

  • ISU Credit Union has sharply increased mortgage lending with the help of two loan programs aimed at educators, including one that has an unusual 12.5-year term.
  • The credit union has added a third loan to help COVID-19 first responders afford new homes.

Ron Rippee, Lending Manager, Idaho State University Credit Union

The math is simple: 10 plus 15 divided by 2 equals 12.5. And that’s how Idaho State University Credit Union($262.2M, Pocatello, ID) came upwith its Velocity Home Loan.

It’s a 12.5-year, fixed-rate note that fits neatly between the 10-year note that made for a payment just out of reach for many members and the 15-year loan that was longer than some members wanted.

We live in a rural area, and many of our members prefer shorter-term loans, says lending manager Ron Rippee. Our mortgage staff was looking for an out-of-the-box product for them. We hoped this product would give them a payment theycould comfortably handle.

Velocity Home Loan is one of three home mortgage products created specifically for the credit union’s Idaho field of membership which comprises ISU students and alumni, along with many southeastern Idaho school districts and businesses.Another loan is aimed at thanking first responders to the pandemic crisis.

Forever Home. Half The Loan.

That’s a marketing motto for the Velocity Home Loan, which Rippee says has been more popular than the credit union expected.

We’ve closed 165 Velocity mortgages since May 2019, the lending manager says. That’s increased our portfolio by 26.1% in 13 months.

The Velocity name was a creation of marketing manager BJ Fillingame, and the terms are designed to make the credit union stand out in a marketplace where its major competitors are other credit unions.


FOR ISU Credit Union | DATA AS OF 03.31.20
Callahan & Associates |

ISU Credit Union’s first mortgage growth grew after the cooperative introduced its Educator Home Loan in late 2016. Growth surged dramatically after the credit union introduced the Velocity Mortgage in May 2019.

The loans have primarily been for refinancing, and the credit union keeps them in the portfolio. The interest rate is 0.125% below the published Freddie Mac rate for 15-year notes with a minimum cap of 2.75%.

Rippee says the credit union waives all fees except for the drive-by appraisal for refinances, and members pay normal fees for purchase loans. The credit union will approve loan-to-values up to 95%, and the property must be an owner-occupied, primaryresidence. No manufactured or modular houses, condos, or townhouses.

The Educator Home Loan

The Velocity Home Loan follows on the success of the Educator Home Loan, which Rippee says he created in October 2016 to offer an attractive refinance or purchase loan to the cooperative’s SEG while thanking them for their service.

The Educator Home Loan is a conventional loan for anyone who works at an educational institution and is based on Freddie Mac’s published rate. Waived fees include everything except the appraisal, which means approximately $1,500 in savings on a$100,000 loan, Rippee says. Plus, ISU Credit Union makes a $250 donation to the school program of the member’s choice after each closing.

The cooperative has closed 125 of the Educator Home Loans so far, growing its portfolio by 21.7% as a result, according to Rippee.

We’ve also donated $31,250 to various local school programs in our members’ names, the lending manager says. The Education Loan program has been a great success.

ISU Credit Union highlights loan terms and the donation component on its marketing collateral for the Educator Home Loan. To view a larger version, click here.

ISU Credit Union used member feedback to design a loan for educators. The Velocity Home Loan offers a 12.5-year term plus other enticements. To view a larger version, click here.

The credit union took out ad spots in the Boise Weekly to promote the 12.5-year Velocity Home Loan. To view a larger version, clickhere

A Home Loan For Heroes

The Hero Loan is our new product for 2020, Rippee says. With all that’s happening, we wanted to offer a program that would help us say thank you’ to those who serve our communities.

5 Loan Lessons For Serving Educators

Ron Rippee, lending manager at Idaho State University Credit Union, shared five best practices the credit union has discovered while creating and offering mortgage products targeted toward school-heavy SEGs.

  • Know your market. This include trends, community needs, and the overall economic stability of your footprint.
  • Know your membership. The more you know about who your members are, what their needs are, and their general financial situations, the better you can design mortgage products that directly meet those needs.
  • Think outside the box. Everyone offers conventional mortgage loans. What separates your credit union from any other lender?
  • Hire the right staff. Lenders must take ownership in their jobs and understand the importance of what they do and the importance of the membership. You can teach the technical part of mortgage lending; it’s harder toteach drive and pride.
  • Work with marketing and executives. Marketing has a lot of say in how even great ideas are received. So, work together to be successful. An engaged executive team willing to step outside the box also is vital. The executiveteam at ISU Credit Union was involved in every aspect of the credit union’s new products. That support was imperative.

The Hero Loan goes up to 97% LTV for a purchase note and 95% for a refinance. It is open to anyone in law enforcement, fire departments, EMT personnel, paramedics, nurses, and active military.

This loan has a normal published rate, Rippee says. Once we close this loan, we gift back to the member one-half of their original loan origination fee to thank them for their service to our communities.

ISU Credit Union has closed four Hero Loans and has given back more than $5,000 to those members, Rippee says. And, it’s got many more of the loans in the pipeline.

Giving Back And Becoming A Player

Giving back to its communities and members through innovative loan products has helped ISU Credit Union gain ground in a market that, like many, has been ramped up by record-low rates. Rippee says his shop has grown its portfolio by 36.8% during the past13 months of record volume.

All these new loans coming in have made it a challenge to keep up, he says. In response, the cooperative has added mortgage loan officer and a processor, plus a document closer position.

Rippee himself is a certified underwriter and has taken on some of those duties, further helping loans move through the process more efficiently.

When I started at the credit union in 2014, our mortgage footprint was limited in our FOM, he says. But over the past six years, we’ve grown our footprint and have become a player in our mortgage market.

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August 5, 2020

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