TGUC Partnership Helps Credit Unions Grow Through Embedded Home Financing

For credit unions seeking new avenues for responsible lending and deeper community engagement, home improvement financing offers a powerful opportunity. By meeting members at their point of need with flexible, affordable loan options, credit unions can grow lending volume, attract new members, and advance their financial inclusion goals—all while supporting critical projects that enhance quality of life.

This approach is especially relevant in today’s market, where high mortgage rates and aging housing stock are driving homeowners to renovate rather than relocate. Credit unions that position themselves as accessible, mission-aligned lenders for these projects can not only win business but reinforce their role as trusted community partners.

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Why Home Improvement Lending Matters for Credit Unions

• Growing Lending in Underserved Markets: Many credit unions face challenges reaching members in CDFI and Low-Income Designation (LID) areas. Point-of-sale home improvement loans offered through local contractors create a tangible way to serve these communities while staying true to the credit union mission.
• Delivering Financial Solutions When Members Need Them Most: Whether it’s a failing HVAC system or necessary roof repairs, home improvement needs often arise unexpectedly. Offering simple, transparent financing options at the moment of decision ensures credit unions stay competitive against fintechs and national lenders.
• Strengthening Member Relationships and Expanding Reach: By embedding credit union loan offerings directly into home improvement transactions, credit unions can increase visibility, build stronger ties with local businesses, and capture new members through value-driven engagement.

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A Strategic Partnership Model for Scalable Impact

Through a partnership with TGUC Financial, credit unions can deliver unsecured, point-of-sale home improvement loans tailored to their lending criteria and community focus. The model allows for:

• Customizable Underwriting: Credit unions maintain full control over lending parameters, ensuring alignment with institutional risk appetite and member needs.
• Low-Lift Integration: Minimal operational burden with a fast, flexible onboarding process designed to fit seamlessly into existing systems.
• Mission-Aligned Growth: Focus on financing essential home projects, not luxury upgrades, ensuring that growth efforts align with community impact objectives.

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Embedded Lending as a Strategic Growth Lever

As consumers increasingly expect financing options to be available at their point of need, credit unions must consider how to meet members where transactions happen. Embedded lending offers a scalable way to do just that, enabling credit unions to maintain high-touch service while expanding access through strategic partnerships.

By leveraging this model, credit unions can:

• Increase loan volume in key markets
• Reach new members organically through trusted local contractors
• Support financial inclusion initiatives with meaningful, mission-driven lending solutions

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Q&A

Q: Can credit unions set their own lending criteria?
A: Yes. Credit unions retain full control over underwriting guidelines, credit policy, and risk tolerance. Programs are tailored to each institution’s specific goals and market needs.

Q: Is there a minimum volume commitment to get started?
A: No hard volume requirements. Programs are designed to start small and scale based on each credit union’s growth strategy and comfort level.

Q: How are home improvement loans secured?
A: Loans are secured through UCC-1 filings. Additionally, a robust risk management framework is applied, including project verification, contractor diligence, and comprehensive borrower assessment.

Q: Can credit unions market these loans directly to members?
A: Absolutely. Credit unions can promote home improvement financing as part of their broader lending portfolio, with support for tailored member outreach strategies.

Q: What types of projects are typically financed?
A: Essential home improvement projects like HVAC replacement, roofing, windows, doors, and accessibility upgrades. Luxury or commercial-use projects are generally excluded.

Q: How does this help with CDFI goals?
A: By partnering with contractors serving underserved areas, credit unions can grow lending to LMI and LID borrowers, supporting CDFI certification and impact objectives.

‍📅 Schedule time with Ben to discuss home improvement lending with TGUC Financial!