Foundational Excellence

Episode 17 | The Construction Lending Podcast

In this conversation, we’re joined by Andy Woodman, Director of Mortgage Lending at Tennessee Valley Federal Credit Union (TVFCU). TVFCU has recently made waves in the construction lending arena with the roll-out of its new construction program. Andy brings us inside the journey of implementing this service, targeting the inventory shortage in home sales and responding to the demand from their members in their extensive 17-county coverage area. As we unpack the inception and execution of this innovative program, Andy will share with us the operational essentials such as infrastructure support, specialist staff recruiting, builder vetting, and the importance of documentation. We discuss not just the technicalities of the construction lending program at TVFCU, but also the passion that’s necessary to drive such a venture forward.

Episode Recap

Laying Foundations: TVFCU’s Strategic Approach to Construction Lending

The landscape of lending is ever-evolving, with financial institutions constantly seeking new ways to serve their customers better and stand out in a competitive market. In this episode of The Construction Lending Podcast, we dive into the experience of Tennessee Valley Federal Credit Union (TVFCU). With special guest Andy Woodman, Director of Mortgage Lending at TVFCU, we unravel the nuances of launching a successful construction lending program, the collaboration within the credit union community, and what the future holds for such initiatives.

Branching into Construction Lending

TVFCU’s leap into construction lending was not merely a business move; it was a response to the needs of its membership and the community. Observing a gap in the housing inventory and fielding numerous member inquiries, the institution recognized a golden opportunity. To seize it, the leadership team laid down a strategic plan that would bring a new construction lending product to market—a move that demanded planning, infrastructure support, and the recruitment of staff with specialized product knowledge.

A Steady Rollout

Andy’s insight into implementing the program is invaluable, especially his emphasis on a steady rollout. By avoiding the temptation to cut corners, TVFCU built a robust foundation for its new service. Woodman emphasized the imperativeness of thorough documentation and processes, reminding us that rushing can lead to pitfalls down the road. Being open to tweaks and learning from the market has been a central theme in TVFCU’s approach to this venture.

Relationships with Builders

One of the critical elements in construction lending, as TVFCU discovered, is the partnership with builders. Having a transparent and advanced understanding with construction professionals not only smoothens the loan process but also ensures projects remain on track. TVFCU’s experience with a builder, whom they were also financing, highlights the value of trust and mutual understanding in these relationships.

Learning From the First Few Loans

There’s a particular kind of wisdom that only comes from experience. For TVFCU, the lessons learned from closing their initial loans have been enlightening. Host Sean Faries expressed the importance of loan originators understanding the reasons behind the information they collect and being clear about builders’ requirements to avoid misunderstandings. It’s a proactive approach to learning—an approach that encourages seeking help and networking within the credit union space for shared wisdom and collaborative growth.

Innovation and Education

In the podcast, Andy points to the challenge many lenders face around understanding construction lending fully. Pitching it as a viable and profitable product to the higher echelons within the financial institution requires both education and evidence of success. Once this is achieved, as evident through TVFCU’s experience, the benefits are manifold—from market notoriety to expanding one’s brand and carving out a niche in lending offerings.

Recommendations for Success

Andy did not hold back on the solid advice for lenders considering their construction lending trek. He recommended being diligent, embracing the guidance of others in the field, and performing necessary background checks on potential builder partners. He also emphasized the importance of sharing experiences and tapping into the wealth of knowledge within the community.

Careful Expansion of Mortgage Lending

TVFCU’s discussion on mortgage lending showcased the potential for lenders to thrive in this domain. Passionate leadership and a nurturing approach to these programs were heralded as integral for long-term success. Sean Faries added that passion helps drive program growth, underlining the significance of having dedicated leaders at the helm.

The Road Ahead

TVFCU has found its stride in construction lending with minimal marketing yet evident success through closed deals and a growing interest pipeline. Plans to amplify awareness through various channels are in place, with a belief in the opportunities this product unfolds for members who are also builders or involved in construction.

TVFCU’s journey impressively demonstrates the delicate balance between planning, execution, and adaptability. The broader lessons here speak to the heart of credit union philosophy—service, education, and collaboration. As such entities continue to innovate and tailor their offerings to the unique needs of their members, we can expect the landscape of construction lending to continue growing, informed by experiences such as those shared by the Tennessee Valley Federal Credit Union on our podcast.

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