Credit unions never got involved with sub-prime mortgages, and are, therefore, very solvent and have the money to loan.

Of course, their lending is more along the lines of Jimmy Stewart’s “It’s a Wonderful Life”, which means you’ll have to document everything.

The interesting thing about credit unions is they are non-profit. That means loans are not only competitive with banks that sell their loans on Wall Street, but are usually lower than bank mortgages.

Credit unions use their own money to lend and then keep the loans in house and return the “profit”, the interest payments, to their members. Credit unions serve their members who pool their money together with the expectation they’ll get a return on their investment.

According to the National Credit Union Administration, credit unions, through September, saw an increase of 15.1% in the number of fix-rate mortgages outstanding compared to the same period in 2007. Adjustable rate mortgages were up 11.8%.

Membership Eligibility. By current federal statute, credit unions cannot serve the general public. People qualify for a credit union membership through their employer, organizational affiliations like churches or social groups, or a community-chartered credit union.

To find a credit union, go here: http://www.findacreditunion.com/

Another place to find a mortgage is a local bank. As with credit unions, local banks will look long and hard at your application. You will need to have a down payment. Local banks are not going to give a loan to someone who can’t afford it.

Even if you’re not in the market for a home right now, it will pay off in the future to gain membership in a credit union and/or open a bank account at a small local bank.