Pictured with Church Koinonia Federal Credit Union manager Ann Jones-Pierre, left, and IDA program manager Rebecca Cowan, Tiffany Kyles purchased a vacant lot in Chattanooga where she hopes to help build a Habitat house in 2011. Through financial classes and a credit union account, she was able to save enough money to buy the property.A credit union made up of members from 52 mostly black churches wants to help more than two dozen people with low to moderate incomes buy homes by the end of 2011.
By showing members how to save and then contributing $2 for every dollar put away, the Church Koinonia Federal Credit Union already has proved that it can help those of lesser means achieve that unlikely goal.
Just ask Tiffany Kyles.
In just four years, the single mom has gone from life in public housing, to Section 8 housing, to the verge of home ownership, thanks largely to Koinonia.
The credit union helped her save $7,500 toward the purchase of land for her home in October. Habitat for Humanity will start construction in late spring.
"Whoever heard of somebody helping you get money?" Kyles said. "I have banked with my bank for years, and they've never offered me anything but paying overdraft fees."
It took a decade for the credit union to put together the assets needed to help low-income people become homeowners, but the goal all along was to help them become better off financially.
"Our objective is to assist people in creating assets," said Ann Jones Pierre, manager of the Church Koinonia Federal Credit Union. "We all know that homeownership creates an asset if you manage it properly."
The 10-year-old credit union helped Kyles as well as another single parent buy their own homes this year, the first time in its history that it has helped members become homeowners.
"It's been a maturation process," Pierre said. "The credit union is working on being stable, increasing its membership, increasing its capital. It's just a progression."
Since it formed in 2000, the organization has grown from about 15 churches to 52 churches and merged with the Bethlehem Center Credit Union. That expanded its membership base to serve not only people affiliated with certain religious congregations, but all low- to moderate-income residents, officials said.
The credit union, which had just under $288,000 after its first year, now has more than 1,533 members with assets of more than $2.74 million, according to the USACreditUnions.com website.
Eddie Holmes, board chairman of the Chattanooga Housing Authority, said Koinonia helps to bridge the gap of financial services to people with low to moderate incomes.
"They make a big difference because they're helping people right on the line," Holmes said. "They're servicing people other credit unions may not be able to help."
UNIQUE PROGRAM
Koinonia is the only credit union in the city designated to serve low-income residents, said Tom Gaines, president and CEO of the Tennessee Credit Union League.
The Hope Chest program allows Koinonia Credit Union members to save money to buy homes, continue their educations or start small businesses.
Koinonia has a unique perspective and experience in working with economically disadvantaged people, said Connie O'Neal, Habitat for Humanity's director of family services.
"It goes a step further to meet people where they are, and it is very nurturing," O'Neal said.
Any resident who receives the federal earned income tax credit likely meets income requirements for the Hope Chest program, officials said. A single person with three or more children may earn up to $43,352 a year. A married couple with three children may make up to $48,362. A single person with one child may make up to $35,535.
For every dollar a member saves in the Hope Chest, the credit union matches it with $2, up to a maximum of $5,000.
That allows members to take ownership in saving for their own home and it creates more of an incentive for them to save, Holmes said.
O'Neal called the program "extraordinary."
"I don't know of any other program that allows such benefit," she said. "It's wonderful for families who really struggle just to meet the normal challenges of everyday requirements for rent and utilities. They don't always have opportunity to build a nest egg for savings."
The Hope Chest program is funded by a $50,000 grant from the Benwood Foundation and a $50,000 grant from Assets For Independence, a federal program that helps low-income families get out of poverty.
EYEING GROWTH
Kyles, 26, was a single mom in the Villages at Alton Park in 2006 when she noticed a flier from the Bethlehem Center Credit Union that discussed a matching savings program.
Kyles saved $2,500 of her own money in the program by September 2010. Then Koinonia put in its $5,000 match. Kyles used the $7,500 and a grant from Habitat for Humanity to buy the land for her house.
By next fall, she plans to move into her new home.
Meanwhile, the credit union is planning an open house for its first homeowner in January. That owner is a single mom with a daughter in her first year of college.
The Rev. Paul McDaniel, pastor of Second Missionary Baptist Church and chairman of the Church Koinonia board of directors, said helping people become homeowners exemplifies the benefits of having a credit union targeting people with low to moderate incomes.
"We're pleased that we're serving those who would not have been so served without our being here," he said.
The credit union now has its sights set on becoming a full-service institution that can issue checks and make loans for mortgages and business development. Some early organizers of the credit union dream of it eventually becoming a bank, McDaniel said.