Financing For Adoptive Families
CreditUnions.com | By Sharon Simpson
Firefly Credit Union’s Adoption Loan provides a much-needed, low-cost financing option to cover up to 90% of the costs associated with adoption, which can range from $5,000 to $45,000.
Minnesota's Star Tribune ran a piece in early 2018 about Geoff Bullock's adoption experience and the adoption loan from Firefly Credit Union that followed. Read it here.
The Need
When Firefly Credit Union ($1.3B, Burnsville, MN) launched its Adoption Loan program in February 2018, the credit union didn’t expect the niche product to have such a big impact or attract such local press coverage.
But the credit union’s own community engagement and education specialist, Geoff Bullock, knew from firsthand experience what a powerful loan this could be.
“I have two adopted daughters,” Bullock says. “When we found out the legal fees to adopt our youngest were going to be $35,000, it was a ‘what do we do?’ moment.”
Bullock’s family was able to scrape together the money, but he recognizes the challenge other prospective adoptive families face.
The Solution
Firefly Credit Union looked at the need for adoption financing from the borrower’s experience — not knowing exactly how much the fees and other expenses would total — and created an affordable, lockable line of credit.
“The product is similar to a HELOC,” Bullock says. “The draw period is two years. If a borrower takes out the maximum $40,000 and makes minimum payments, it will take eight years to repay.”
The loan is an unsecured line of credit, which offers lower rates than many signature or personal loan options. And Firefly deposits a welcome gift of $500 in the new child’s savings account.
The Results
Despite the multiple agencies involved and long waiting period that are common in the complex adoption process, the credit union has had seven families book loans so far. Six are for domestic adoptions, and one is for an international adoption.
“A few of the loans have come from members but most have come from non-members who join because of the loan,” Bullock says. “We have other families in the process but haven’t booked the loan yet.”
The credit union is now working closely with adoption agencies and has begun expanding its network. For their part, the borrowers are promoting Firefly within their own networks.
What makes the loan a standout is the fact there aren’t many true adoption financing options available. Firefly’s program is a stand-alone adoption loan with a low rate and no collateral.
“Some adoption loans are just personal loans and come with the higher interest rate,” Bullock says. “Or they’re HELOCs marketed as an option, but obviously that requires using your home as collateral.”
Parting Advice
“It’s easier than it looks,” Bullock says.
The credit union leader admits creating the product was daunting at first, but the process went more smoothly than expected. And the loan has made a significant impact.
“It is a lifelong connection you’re building with these members,” Bullock says. “They are highly motivated knowing they have an advocate in us.”