Alabama ONE closes state’s first DREAM mortgage.
An Alabama credit union has completed the state’s first transaction under a mortgage program designed to help homeowners escape the “lock-in effect” created by higher interest rates, a challenge that has reshaped the housing market in recent years.
Alabama ONE Credit Union has completed the first Alabama transaction using a mortgage product aimed at helping homeowners move despite being locked into low-rate loans, marking a milestone for a lending strategy that seeks to address one of the biggest constraints in today’s housing market.
The Tuscaloosa-based credit union said Alex and Stormy Cameron became the first Alabama homeowners to close under the DREAM program, short for Discount for Real Estate Affordability and Mobility. The transaction provided the couple with roughly $95,400 in principal balance reduction, allowing them to increase the down payment on a larger home and cover closing costs.
For homeowners who secured historically low mortgage rates during the pandemic, today’s higher borrowing costs have created what many lenders describe as a “mortgage lock-in effect.” Many homeowners are reluctant to sell because replacing an existing low-rate mortgage with a new loan would significantly increase their monthly payments, limiting housing inventory and slowing home sales.
The DREAM program attempts to break that cycle by offering borrowers a discount when paying off their mortgage balance, creating additional equity that can be applied toward a new home purchase.
“It helped us put more down and made the next home more affordable. It really repositioned us financially,” Alex Cameron said in a press release.
He said the nearly $95,400 reduction fundamentally changed the family’s financial position.
“To take a $95,000 reduction in your mortgage, it repositions people 100%,” Cameron said. “It’s an equity play that helps them reposition in a better stance, whether it be more liquid in their account or a better positioning when they actually structure their mortgage.”
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For Alabama ONE, the program is intended to benefit both borrowers and the institution itself.
“We approached this opportunity the same way we approach every lending decision: by focusing on our specific members’ needs while still balancing risk and return,” Jason Halperin, the credit union’s chief retail officer, said. “In this case, everyone involved benefited from the transaction.”
Supporters of the program argue that it addresses more than just affordability. Rising interest rates have left millions of homeowners holding mortgages they are reluctant to surrender, reducing housing mobility for families looking to relocate, upsize or downsize. At the same time, financial institutions have been managing portfolios shaped by those long-term, low-rate loans.
By reducing outstanding mortgage balances, DREAM aims to increase flexibility for borrowers while improving portfolio liquidity and loan production for participating lenders.
The initiative comes as Alabama ONE continues an aggressive growth strategy.
Earlier this year, Peoples Independent Bancshares agreed to sell substantially all of the assets and liabilities of Peoples Independent Bank to the credit union, marking Alabama ONE’s second acquisition involving a Peoples Independent Bancshares subsidiary. The credit union previously acquired First Bank of Linden in 2021 and completed its purchase of First Bank of Wadley in 2024 after announcing that transaction in late 2022.
Financially, Alabama ONE has also posted stronger results. According to National Credit Union Administration call report data, the $1.5 billion-asset credit union earned $4.5 million during the first six months of 2026, more than double the $2 million reported during the same period a year earlier. Membership has grown to nearly 96,600.
“We were able to generate positive fee income, strengthen our balance sheet by reducing credit risk and provide a solution that greatly benefits our membership.”
– Jason Halperin
Chief Retail Officer
Alabama ONE Credit Union
Ken McCarthy is manager of marketing communications at Tyfone, where he monitors the credit union industry and contributes to conversations shaping its future. He previously covered credit unions and community banking for American Banker and S&P Global Market Intelligence. He holds a journalism degree from Point Park University and has more than 15 years of experience covering financial services. He is also the author of three literary fiction novels.
