Banking on Immigrant Communities
August 15, 2018 | Chicago Stories | Chicago Commitment

Second Federal credit union serves the community by providing fresh start loans to allow people to reestablish credit, banking products that help immigrant families avoid predatory lenders, and mortgages for homebuyers who have trouble accessing credit.


 

Hugo Abiles Perez was able to realize his dream: buying a first home for his family, including kids ages twelve, eight, and six months. A mortgage from Second Federal allowed Abiles, a 36-year-old machine operator, and his wife to settle in suburban Bensenville. They had carefully chosen the area for its good schools and other amenities.

Abiles had no luck qualifying for a mortgage with other lenders. But housing counselor Sandy Cabrera and her colleagues at The Resurrection Project helped him boost his pre-approval rating, showing him how to document increases in his income in the paperwork needed for a mortgage.

“Without them I couldn’t have bought a house,” said Abiles, who completed the purchase in February, two years after starting their search.

The investment helped Second Federal preserve its legacy and the assets of the people it served—largely Eastern European and Mexican immigrants in Chicago’s Little Village.

As a credit union, Second Federal serves the needs of the community by providing car loans; mortgages for homebuyers who might otherwise have trouble accessing credit; and loans to cover the fees immigrants pay when they apply for Deferred Action for Childhood Arrivals (DACA), green cards, and citizenship—all expensive processes. Second Federal has helped more than 1,000 families, many of them immigrants, to avoid foreclosure through loan modifications and other services in the wake of the economic crisis. Second Federal also provides banking products that help immigrant families avoid predatory lenders and other financial pitfalls—for example, fresh start loans that help people reestablish credit.

“The key piece is education to make dreams come true and avoid predatory practices because they are misled or don’t know how to read loan documents,” said Second Federal President Rodolfo Medina.

Second Federal was born in 2013, when The Resurrection Project joined with the North Carolina-based Self-Help Federal Credit Union to rescue Second Federal Savings and Loan, which was decimated by the foreclosure crisis and in federal receivership. MacArthur provided a low-cost, long-term impact investment to Self-Help allowing it to acquire and revive Second Federal Savings and Loan. The investment helped Second Federal preserve its legacy and the assets of the people it served—largely Eastern European and Mexican immigrants in Chicago’s Little Village.

Mario Alejandro, a DACA recipient and student at Morton College has long dreamed of opening a barber shop. Thanks to the loan and services provided by Second Federal and The Resurrection Project, Alejandro said, “Now I have a lot more confidence. My goals seem closer.”

 

MarioAlejandroLopez,center,withparentsMarioLopezandEsperanzaVillalobosattheirhomeinCicero.AloanfromSecondFederalhashelpedtheyoungerMariomaintainhisDACAstatus.PhotobyKariLydersen

Photo by Kari Lydersen

Mario Alejandro Lopez, center, with parents Mario Lopez and Esperanza Villalobos at their home in Cicero. A loan from Second Federal has helped the younger Mario maintain his DACA status. 

 

Medina, who started as a branch manager with Second Federal Savings and Loan in 2009, said The Resurrection Project’s deep community ties were crucial to Second Federal’s rebirth.

At the time that Self-Help and The Resurrection Project intervened, Second Federal had 1,100 families with mortgages at risk of foreclosure, 30 percent of them in delinquency. Ultimately, 96 percent of the mortgages were modified, allowing families to stay in their homes.

“Many [at risk of foreclosure] were probably families of the parishioners at the parishes we worked with,” said Medina.

Now Second Federal credit union has invested more than $150 million in mortgages and loans and helped roughly 1,400 immigrant families and first-time buyers purchase homes.

 

FormerIllinoisGovernorPatQuinnjoinscommunityleadersincelebratingthereopeningofSecondFederalSelf-HelpCreditUnion

Former Illinois Governor Pat Quinn joins community leaders in celebrating the reopening of Second Federal Self-Help Credit Union.

 

Cabrera, the housing counselor, encouraged Abiles and his wife to stay persistent as their search dragged on. Cabrera notes that many Spanish-speaking immigrants like Abiles find it challenging to negotiate the home-buying process.

“When they just walk into a bank, the bank doesn’t explain what they need to do,” Cabrera said. “They don’t know there are loans they could get.”

Medina notes that buying a home is especially important for immigrants who might not have a 401k retirement account or Social Security.

“So owning their home will be the only source of wealth when they retire,” Medina said. “Buying a home creates some wealth in a family. You help an individual; you help a family; you help a community.”


 

MacArthur has provided $43.55 million in Program-Related Investments and grants to the Center for Community Self-Help and its affiliates since 1988.

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