ST. PAUL, Minn. (May 01, 2017) – Affinity Plus Federal Credit Union is resuming construction loans beginning Monday, May 1, at its 28 branches statewide, officials announced today.
John Simonsen, director of real estate, said Affinity Plus is again offering the loans because a red-hot housing market, especially in the Twin Cities metropolitan area, is moving potential home buyers to consider construction.
“Homes are flying off the market. Bidding wars are going on. Sellers are getting top-notch prices on homes. That’s what pushing people to consider construction,” he said. “In that context, it makes sense for us to resume.”
Affinity Plus considers its role to not just offer construction loans but guide members through the complex, often year-long building process, he said. “We feel Affinity Plus is positioned really well because of our past experience, the relationships we establish with our members and our core values.”
IMPROVED REGULATIONS FOR ALL
Regulations and best practices also have evolved and improved over the last several years, which serves both Affinity Plus and its members, Simonsen added.
“It caused problems because the process wasn’t defined enough. Now it is. As much as guidelines and regulations can be a barrier, they do protect and help the process,” he said. “From disclosures to draws to completion dates, appraisals and building jobs – it’s holding everybody throughout the process accountable.”
KEY LOAN FEATURES
Simonsen said Affinity Plus’ construction-loan process includes several key features. Borrowers will pay only interest through construction. Then, as the project completes, the mortgage loan officer will develop a new, conventional loan and refinance at closing.
Affinity Plus also emphasizes the importance of quick approval and turnaround for “draws,” or periodic payments to sub-contractors doing work like electrical, plumbing and heating and air conditioning, he said.
Local mortgage loan officers – Affinity Plus has 35 across Minnesota – will handle nearly all aspects of members’ loans, Simonsen said. Additional related services will be handled by Affinity Plus staff, as well.
“Even though we paused construction loans a few years ago, we still had members who said they were looking forward to building a house,” he said. “It’s not that they couldn’t go elsewhere, but they wanted to be with Affinity Plus. That’s saying something, and now we look forward to serving those needs.”
FIRST LOANS – TO EXISTING MEMBERS
Simonsen said the first members to have construction loans likely will be existing members, and then over time, new members attracted to Affinity Plus’ overall approach to serving members.
He added that the credit union’s mortgage loan officers recognize the spring construction season is well underway. “We don’t think we’re missing out. In fact, we almost prefer gradual growth again. That will help us make sure we are doing the very best job possible for our members.”
He noted that a second wave of people interested in home building often occurs in late summer and early autumn. This permits builders to get the foundation in place before first frost arrives and give them the opportunity to continue construction through the winter.
Overall, Simonsen said, Affinity Plus “is going to do construction loans the right way and make it a good experience. Building a house is a heck of a project, and for members it’s exciting and even quite emotional. We’ll share that excitement with them and have their backs as we help them achieve their goals.”