A Northeast Ohio credit union that plans to expand into Akron will commit about $50 million toward making housing more affordable for area residents.
The 7 17 Credit Union, based in Warren, plans to put a total of $100 million toward affordable housing by offering interest rate reductions of 2 percentage points for home purchases, its president and CEO, John Demmler, said Thursday. Half of it is earmarked for Greater Akron. The credit union plans to open branches in downtown Akron, Wallhaven and Ellet in 2026.
Demmler said he expects the investment to help nonprofits build or rehab houses that they will then sell to residents.
“It’s how we think we can make our contribution,” Demmler said.
The credit union’s interest rate reduction comes on top of other initiatives designed to reduce the cost of housing. One, which eliminates closing fees, can save buyers thousands.
Demmler said his own experience of paying unexpected closing fees when he bought his first condo played into that practice — the fees wiped out money he had saved to buy furniture for his new home. He slept on a futon for years.
Demmler said details of the investment, such as what nonprofits 7 17 might partner with, are still in the works. The 7 17 funds could be useful if they amount to a mortgage subsidy that helps write down a family’s total mortgage costs, said Rochelle Sibbio, the president and CEO of Habitat for Humanity of Summit County.
Habitat for Humanity offers zero-interest mortgages that it holds on to, and Sibbio said there are federal restrictions on nonprofits directing homeowners to specific mortgage lenders. But she said putting $50 million toward new home construction in the area is “significant” and that it could be meaningful for buyers.
“It’s potentially an amazing opportunity,” she said.
The credit union announced its plans at Thursday’s minor league RubberDucks game, where Lt. Gov. Jim Tressel threw the first pitch. Team owner Ken Babby told city leaders gathered for the moment he thought the credit union’s commitment to the region would be felt for years, while Tressel said the effort would help reduce one of the biggest barriers the state is contending with as it tries to match people with jobs.
“This is going to be huge for our region,” Tressel said.
Credit union wants to reduce the cost of home ownership
Demmler said he expects to offer nonprofits discounted lines of credit, with the expectation that these organizations could pass savings to homeowners. The discounted interest rates would be permanent, he said.
In the Youngstown area, 7 17 is partnering with a developer to invest $40 million in reduced-rate financing to build 270 homes by 2030. Demmler said he’s interested in modular homes as a way to reduce the cost of new construction. Rehabbing old houses, he added, is another way to bring down the costs of ownership.
The credit union will focus on communities where its efforts can help raise property values, Demmler said.
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“We’re starting to explore where we can have the most impact,” Demmler said. “We are willing to be a good community partner. We’re not trying to do something unique; we want to get behind the work that’s already being done.”
Akron Mayor Shammas Malik said he was excited to see 7 17’s investment. Malik has had initial discussions with the credit union, but said details are still in the works.
“We know housing is so important,” he said. “This will be another tool in the toolbox.”
The credit union’s efforts mesh with the larger trend of investment in the city, said Steve Millard, the president and CEO of the Greater Akron Chamber. Millard said 7 17’s planned investment adds to Akron’s momentum.
Tressel echoed his sentiments, saying the pendulum is now swinging toward Ohio. In recent years, he said, 63 companies left the coasts to begin or expand here and the state has “unbelievable opportunities.”
“We’re going to be just fine,” Tressel said. “The pendulum is going to swing through and we’re going to grab hold of it.”
Meanwhile, Tressel said transportation and childcare remain issues the state must contend with, in addition to building enough housing to grow the workforce. He said quality of life activities like the RubberDucks, and leadership like what he sees in Akron, will help the city and the state succeed.
“We have an opportunity right now,” Tressel said. “We know what we need to do. Now it’s a matter of go out and do that.”
RubberDucks-branded credit card will help create a new scholarship
Also on Thursday, 7 17 plans to announce a co-branded Akron RubberDucks credit card intended to help people manage personal debt. Demmler said a 90-day interest rate of 7.17% could help people with credit card debt at much higher rates transfer balances and save on fees.
“That alone will help transform people’s lives,” Demmler said.
Additionally, the credit union will donate 7.17 cents to a RubberDucks fund each time the card is swiped. Jim Pfander, the RubberDucks’ president and general manager, said in an email the team plans to use that money to fund an annual scholarship.
“At this point further details are still being decided, but it will be an exciting venture for the RubberDucks and 7 17 Credit Union and another great way to give back to our community,” Pfander wrote.
And 7 17 also plans to focus on financial literacy training, with a goal of educating 10,000 people. Demmler said that, together, the initiatives are meant to help bring down costs for people to create more affordability and to give them more financial stability.
The efforts are all intended to be long-term assurances.
“For us, this is an extraordinary commitment that we’re making toward bringing affordable housing to the region,” Demmler said. “We definitely have a lot of plans. We just think there’s a better way to do banking.”