“Unconventional” players in the home loan marketplace deserve a second look from credit unions, said Robert Delaney, COO of Members Insurance Agency.

The decline of traditional entities like Fannie Mae and  Freddie Mac – as well as a large chunk of the much-diminished mortgage industry – have helped drive lenders and borrowers to more obscure government programs with the United States Department of Agriculture and the Department of Veterans Affairs, Delaney said during a presentation today at the Great New England Credit Union Show in Boxborough.

Even the Federal Housing Administration has been largely overlooked from lenders in recent years, but has made a roaring comeback in the past six to nine months.

Credit unions are dealing with more borrowers with low or moderate income or poorer credit scores who might not qualify for loans under more commonly used programs, he said, but often these applicants are an ideal fit for other types of loans or loan guarantees.

Delaney acknowledged that while these programs might not be useful for every credit union, they provided a possible alternative to simply turning borrowers away. Borrowers who are referred to a different lending institution, such as a bank, are more likely to take all their business to that institution in the future – and that’s something credit unions want to avoid, he said.