IRON RIVER – CoVantage Credit Union has announced that they have been awarded a $2 million grant from the U.S. Treasury’s Community Development Financial Institution Fund.

The purpose of the Community Development Financial Institution Fund (CDFI) award is to help people of modest means by providing funding to financial institutions in rural and low-income communities that is to be used specifically to offer affordable products and services to those who need assistance.

“Part of our mission at CoVantage is to help those having financial difficulty. We feel very fortunate to receive this grant that will help us continue to live out our mission,” said Brian Prunty, chief executive officer of CoVantage Credit Union.

According to Prunty, CoVantage is using the $2 million grant to create a down payment assistance program, called CoVantage Creates Homes, which has the potential to benefit hundreds of families throughout the communities served by the credit union.

CoVantage will contribute an additional $13 million in loan funding to supplement the program. In addition to assisting with a home buyer’s down payment, CoVantage Creates Homes will also provide funding to make needed repairs to a home if it’s under distress or creating an unsafe living environment.

For those that already have a mortgage with CoVantage Credit Union, the program can be used solely for repairs to existing homes provided a licensed inspector deems them necessary.

For those who would like to listen to presentation about the program and hear about other solutions for financial assistance, they are invited to attend an informational session to be held on Thursday, March 5, from 3 p.m. to 5 p.m. at the Windsor Center, 612 West Adams St. in Iron River.

“Please make a reservation to reserve your spot. You will also be able to meet with a mortgage lender and apply,” a spokesperson said.

CoVantage Creates Homes will offer home buyers an opportunity to borrow up to 90 percent of the purchase price or appraised value, whichever is less, and features a low rate fixed or adjustable rate mortgage (without requiring private mortgage insurance).

In addition, the buyer may obtain a home improvement loan in the form of a second mortgage to complete any needed home repairs. There is no payment due and no interest charged unless the first mortgage is refinanced, the home is no longer the primary residence, or the home is sold.

To qualify for the program, borrowers must meet income limitations and other credit union lending criteria. Borrowers must also provide their own down payment of at least three percent plus closing costs, participate in a home buyer training, and obtain the necessary appraisals, inspections, estimates and/or escrows.

This is the second time that CoVantage has received a CDFI grant. In 2011, they received a $1.5 million grant to aid families in danger of losing their home to foreclosure. Designed for borrowers who would not have been eligible for a traditional mortgage refinance, CoVantage leveraged the $1.5 million grant with $10.5 million of its own funds to provide affordable loans for individuals struggling with mortgage debt.

This resulted in more than 100 families who were able to keep their homes. All grant funds awarded in 2011 have been utilized.