Navy Federal Credit Union is joining the Mortgage Bankers Association and a dozen other stakeholders to form the CONVERGENCE Collaborative to help close the racial homeownership gap.

The $178 billion-asset Navy Federal, the largest credit union in the U.S., said the partnership is designed to address systemic barriers to homeownership among Black, Hispanic and other minority groups in America.

“[We} must help to address systemic problems that have persisted in our nation for too long,” said Navy FCU’s CEO Dietrich Kuhlmann in a press release Monday.

The Mortgage Bankers said the Black homeownership rate was 45.8% in the first quarter of 2023, according to data from last December’s US Census Housing Vacancy Survey. That compares to a 74.4% rate for non-Hispanic Whites, a 28.6% gap that has “diminished insufficiently since the turn of the century.”

In December, Navy Federal Credit Union was hit with a lawsuit accusing the lender of discriminating against minority home loan applicants.

The lawsuit was filed after a CNN report that the credit union approved about 77% of mortgage applications from white borrowers, but only 56% of applications from Latinos and 48% from Black applicants in 2022.

Between 2020 and 2030, 8.5 million net new households are expected to be formed nationwide, with roughly 7.6 million coming in the following decade, according to a recent report from the Urban Institute. Many of the new households will comprise Americans from minority and traditionally underserved populations, Navy FCU said.

The credit union recently announced the hiring of 13-year Freddie Mac veteran Pam Perry to lead its newly-formed Office of Financial Opportunity, which will head the CU’s involvement in the project.

In the role, Perry will work alongside Brittani Ivey, who was installed as the credit union’s executive vice president of real estate lending and financial opportunity in March.

The Mortgage Bankers said that during the next three years, the CONVERGENCE Collaborative will deploy more than $1 million annually to build on the existing network of location-based CONVERGENCE sites focused on expanding minority homeownership.

The current CONVERGENCE cities – Memphis, Columbus and Philadelphia – are part of a major initiative launched by the MBA in 2019.

“The barriers to minority homeownership require a collective effort. In recognition of this challenge, we believe the approach embodied in the CONVERGENCE framework can have a greater impact with this new industry partnership,” said Bob Broeksmit, the MBA’s President and CEO.

“Navy Federal is grateful for the Mortgage Bankers Association’s leadership in bringing together the CONVERGENCE Collaborative. We’re proud to serve as a founding member of this group, knowing the voice and influence of the world’s largest credit union must help to address systemic problems that have persisted in our nation for too long.”

 – Dietrich Kuhlmann
CEO
Navy Federal