Credit unions represent about one-third of all mortgage lending institutions in the U.S. but originate only 15% of all mortgage loans, underscoring the rise of independent mortgage banks (IMBs) since the 2008 financial crisis.
IMBs accounted for about 68% of the purchase mortgage market in 2024 compared to just 7% purchase share claimed by credit unions, according to a white paper published at the end of October by the American Credit Union Mortgage Association (ACUMA). Traditional depositories accounted for the remaining 25%.
Th ACUMA analysis explores the first-mortgage production opportunity that credit unions may be missing amid a sustained home sales slowdown and the rapid digitalization of the mortgage process.
Consolidation among credit unions has steadily increased since the 2008 financial crisis, when there were about 8,000 credit unions and 80 million credit union members across the U.S. As of March 2025, nationwide credit union membership exceeded 140 million, though the number of credit unions in existence had fallen to around 5,000, according to ACUMA.
‘Not just a loan’
ACUMA describes purchase lending as “not just a loan” but a “relationship accelerator,” which the president of the association, Peter Benjamin, former senior vice president of mortgage lending at Lafayette Federal Credit Union, asked panelists to justify in a Tuesday webinar highlighting findings from the white paper.
A mortgage is proven to deepen a credit union’s relationship with their borrower, said Benjamin, but connecting with younger, first-time mortgage borrowers who are probably unfamiliar with the value-add of credit unions can be challenging.
Those younger borrowers have been increasingly sidelined from buying houses because of persistent purchase affordability challenges.
“A big part of life is just knowing something exists,” said Rob Chrisman, a mortgage capital markets consultant and founder of the Chrisman Commentary, a widely read industry newsletter.
“Somebody had to make that chair. Somebody had to make that car,” he continued, underscoring how some modern amenities that many people take for granted in their lives only exist because someone else made certain it was so.
Mortgage divisions at credit unions should similarly insist on their own existence, Chrisman believes.
Credit unions are uniquely situated to educate prospective homeowners on opportunities for homeownership that exist in the market — but many must send those future deposits to competitors if their credit union has not stocked the shelf with first-mortgage products.
According to ACUMA’s white paper, fewer than 40% of credit unions offered first mortgages each year in records going back to 1990, except for 2021 and 2022, when that share ballooned to around 70%.
Credit unions are in an “enviable position” to maintain community-informed strategies, said Chrisman, given how digital banking has rapidly disrupted traditional customer retention techniques and credit unions are “woven into the financial situation of that town.”
‘The No. 1 challenge’
Laird Nossuli, CEO of real estate analytics firm iEmergent, highlighted how credit unions’ share of total mortgage applications has grown from 10% in 2020 and 2021 to 14% in 2022, 17% in 2022 and 15% in 2024. IMBs lost almost 10% application share over that period.
“A lot of that share was smaller-dollar loans,” such as home equity and renovation products, she pointed out, which better align with meeting recurring mortgage needs of existing members.
“The question of affordability is the No. 1 challenge,” said Nossuli of increasing purchase production for any mortgage lender, noting how median income earners cannot afford the median priced home “in most markets.”
Because credit unions have more flexibility than traditional depositories and operate with less interest-rate sensitivity than banks and IMBs, credit unions should be able to leverage more competitive pricing to affordability-constrained borrowers.
Credit unions expanded their share of overall refinance originations from 9% and 8% in 2020 and 2021, respectively, to 14% in 2022, 20% in 2023 and 16% in 2024. They have claimed more than 40% of home renovation loans in each of the past four years while struggling to rise above 7% overall purchase share.
From the ability to offer manual underwriting to credit unions’ touted commitment to financial education, “being there to help the households most impacted by affordability” is how credit unions can try to increase their purchase share, said Nossuli, alongside enhanced flexibility in targeting their mortgage offerings.
Ali Nassirian, senior vice president of secondary sales and lending solutions at Lafayette Federal Credit Union, said scaling up mortgage lending in the current cycle can provide operational benefits to credit unions’ balance sheets.
With the auto loan and revolving consumer credit sectors experiencing pockets of weakness, credit unions can diversify their credit risk by moving their balance sheets toward long-term secured collateral with historically low default rates, Nassirian said, resulting in higher recovery in times of broader economic downturns and more predictable payments.
