Putting home ownership in reach for Minnesota healthcare workers

AHCU’s new ARM loan eliminates many of the most common barriers healthcare workers face when getting approved to buy a home. 

With home prices at near record highs and interest rates limiting buying power across the Twin Cities, home ownership is increasingly out of reach. That’s especially true for early- and mid-career healthcare workers — people who play an essential role in those communities’ health and wellbeing.

Thankfully, healthcare workers in Minnesota have a partner who can work to meet their unique financial needs, and through specialized lending, get them into homes sooner. 

Associated Healthcare Credit Union’s new adjustable-rate mortgage is designed to break down some of the obstacles healthcare workers face in the homebuying world today. It’s a new way the credit union is continuing to serve healthcare workers and their families, and it couldn’t have come at a more critical time, says President and CEO Joel Swanson. 

“We serve healthcare professionals. That’s who we exist for. And typically, they don’t follow a traditional financial path,” Swanson said. “Right now, there’s a lot of people who would like to be able to refinance or get into a home, but because of interest rates and because of high home prices, they’re struggling to do that.”

The program is among a small number in the Twin Cities specifically designed for licensed healthcare professionals — including physicians, nurses and others who serve the overall healthcare system.

How do ARM loans work? And who are they right for? 

Adjustable-rate loans aren’t new, and they’re also not a one-size-fits-all solution. AHCU’s ARM loans are specifically designed for healthcare professionals as they grow their career and income, offering them the flexibility of shorter ownership cycles.

Plus, AHCU’s ARM loans can offer rates that are typically 75 to 100 basis points lower. And if rates do fall before closing, borrowers can take advantage of a one-time rate reset. 

As with any ARM loan, the mortgage will adjust to the market rate at the end of its term, meaning they can be a perfect fit for early-career healthcare workers who may anticipate career and income changes down the line. 

“It allows them to get into that home earlier, banking on those life circumstances changing,” Swanson said.

Removing barriers through flexible lending 

As a Credit Union serving healthcare workers and their families, the AHCU team understands the unique financial needs that those working in the industry often come in with. 

To start, healthcare workers often have higher levels of student debt, with 73% of physician graduates owing more than $200,000. While taking on student loans has become unavoidable for many entering the healthcare field, they can prove to be a major challenge when applying for a conventional home loan, Swanson said. 

With specialized underwriting, AHCU’s ARM loan provides more flexibility for those with a high amount of student debt, including reduced or excluded payment calculations. 

On top of student debt, healthcare workers — including travel nurses and other contract workers — may run into roadblocks due to unconventional employment and income structures. That’s why AHCU’s underwriting can also accept contracts for borrowers starting new roles within 60 to 90 days. 

“Traditional mortgage underwriting doesn’t really help them,” Swanson said. “ There are a lot of obstacles to them being able to get into a home earlier in their career.” 

But underwriting is just one step of the process. Coming up with a downpayment is a major challenge for many homebuyers, especially those without equity from a previous mortgage.

Most convention loans will require costly private mortgage insurance for any downpayment under 20%. But AHCU’s ARM loans don’t require PMI, even with low or no down payments. Ultimately, that means buyers can get approved for a bigger loan while keeping their monthly payments in line with their budget. 

By removing barriers and offering flexibility, AHCU’s ARM loans have already peaked interest among members, Swanson said. But they’re just one product of many tailored to fit healthcare workers at AHCU. 

“For AHCU, specialized lending isn’t about chasing volume. It’s about removing obstacles so healthcare workers can put down roots in the communities they serve. And that’s a competitive advantage for Minnesota’s healthcare employers,” Swanson said. 

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