Lower down payment barriers make homeownership attainable
Several credit unions have launched or enhanced programs that reduce down payment requirements for members struggling with housing affordability. SchoolsFirst Federal Credit Union, Superior Credit Union, and Redwood Credit Union are among those helping prospective buyers overcome a primary obstacle to homeownership.
With only 17% of California households able to afford a median-priced home and first-time buyers nationally facing their steepest down payment requirements since 1989 , SchoolsFirst Federal Credit Union has reduced its down payment requirement from 5% to 3% of the purchase price. The change can save members $17,000 on a typical California home.
The nation’s largest credit union serving school employees announced the enhancement in January, building on an existing benefit that waives private mortgage insurance. In a state where the average home sells for $875,000, a 3% down payment totals roughly $26,000, compared to $43,000 at the previous 5% threshold. The credit union serves 1.5 million members across California through more than 70 branches.
“California’s school employees dedicate their lives to educating and supporting our communities, yet too many are being priced out of the dream of homeownership,” said Bill Cheney, chief executive officer of SchoolsFirst Federal Credit Union. “By reducing upfront barriers, we’re opening doors for our members to put down roots, build stability, and create generational wealth.”
A response to a growing national crisis
The affordability squeeze extends well beyond California. According to the National Association of Realtors’ 2025 Profile of Home Buyers and Sellers, first-time buyers now represent just 21% of all purchasers—a record low since data collection began in 1981. The median age of first-time buyers has climbed to 40, up from the late 20s in the 1980s.
Realtor.com reports that the typical homebuyer now needs seven years to save for a down payment—down from a peak of 12 years in 2022, but still double pre-pandemic levels. Down payment assistance programs nationwide have grown to 2,619, a 6% increase from the previous year.
Andrea Blais, senior vice president of real estate lending at SchoolsFirst Federal Credit Union, said the credit union re-evaluated its program in late 2025.
“Many of the first-time homebuyer programs and down payment assistance programs that exist out there have a lot of constraints associated with them, like income limitations, geography limitations,” she said. “We took a step back and said, how can we make this easier?”
Making the math work for members
SchoolsFirst’s enhanced program goes further: of the 3% down payment, only 1% must come from the member’s own funds. The remaining 2% can come from a gift, potentially reducing out-of-pocket expense to approximately $8,700.
“There’s no easy button when it comes to affordability these days, and particularly in California,” Blais acknowledged. “But it was really the time to put our money where our mouth was and to serve those members we were designed to serve.”
Similar initiatives are taking root elsewhere. Superior Credit Union in Lima, Ohio, dedicated $500,000 to its SuperiorFirst program for 2026, offering up to $2,000 grants to 250 first-time homebuyers. The program, now in its ninth consecutive year, helped 200 members purchase their first homes in 2025.
Grants and forgivable loans expand options
“Purchasing your first home can be overwhelming,” said Phil Buell, president and CEO of Superior Credit Union. “We’re delighted to provide funds that help create homeownership opportunities for our members. Purchasing your home generates long-term wealth, and we are committed to helping members realize their dream.”
In Northern California, Redwood Credit Union’s Community Fund has distributed $292,000 in grants through its Down Payment Assistance program since launching in March 2025. The program offers forgivable grants of up to 5% of the home price or $25,000, whichever is less, and has helped 13 families purchase homes in Napa, Marin, Mendocino, Solano, and Sonoma counties.
For Amit Sharma, a Novato father of two who received assistance through the program, homeownership once seemed impossible. “Between rent, daycare, and everyday expenses, saving enough seemed out of reach,” he said. “We have an emotional connection to this community, and now we have roots here.”
Keep up with the latest strategies in credit union lending, and exchange ideas with colleagues at the Lending Council Conference, November 3-6 in Las Vegas.
