Posted on: Thursday, March 22, 2001
State AFL-CIO to offer mortgages
By Glenn Scott
Advertiser Staff Writer
In a bid to help union members afford the steep cost of buying a home in Hawai'i, the statewide AFL-CIO organization is starting a program offering mortgages with below-market interest rates and, in some cases, money to help with down payments.
The program, to be available for any of the 90,000 members of union locals affiliated with the AFL-CIO in Hawai'i, will go into effect immediately through the locals' offices, said Thaddeus Tomei, president of the Hawai'i State AFL-CIO as well as business representative for Elevator Constructors Local 126.
Modeled after a union program in the Pacific Northwest, the Hawai'i initiative is built around a $20 million commitment from the national AFL-CIO Housing Investment Trust.
The trust will provide $10 million directly for mortgages with interest rates a half-point below market rates for the first three years, said Tomei. The other $10 million will go toward buying other mortgages made to union members, with the goal of reducing payments.
Tomei said the $20 million is an initial figure and could be increased, based on results.
Called the Homeownership Opportunity Initiative, the program is designed for Island workers who, Tomei noted, often hold two jobs to save money toward buying a house or condominium.
"That's part of the reason we're trying to kick this thing off," he said.
The program involves a partnership with the AFL-CIO trust, HomeStreet Bank, PMI Mortgage Insurance Co. and Fannie Mae, the nation's largest source of financing for home mortgages.
It is not yet clear how many union members might benefit from the program. Tomei said the number will depend on the size and terms of the mortgages. For instance, applicants who meet certain income limits can qualify for grants to cover as much as a third of their down payments.
The similar program in the Pacific Northwest provided more than 245 mortgages and $40 million in financing, said Gary Kai, HomeStreet Bank's senior vice president.
HomeStreet, formerly known as Continental Savings Bank, is based in Seattle and Portland, Ore., but also has offices in Honolulu, Wailuku and Hilo.
Tomei said the idea to bring the program to Hawai'i came from a meeting here last November with Mike Arnold, an executive with the housing investment trust. "He asked if I was interested," Tomei recalled. "And I said, 'Certainly."
The program not only gives a boost to home-buying members but helps to promote homebuilding, thereby supporting the job market for union construction workers.
Tomei said the AFL-CIO's trust, a part of the union's pension system, is looking into related investments in Hawai'i, such as developing a residential center for senior citizens. Such a project, he said, would come with two requirements: use of union labor and prospects for an adequate return on the investment.
