Heather and Joe want the lowest interest rate for their residential mortgage. which financial institution is designed to offer low interest rates on residential mortgages?

The answer is Nonbank Financial institutions - Savings and Loans association or better known as S&Ls.

S&Ls focus strongly on residential mortgages. By law, they need to invest 65% of their assets or more in residential mortgages. Savings and Loan associations resembles banks or credit unions in many aspects, but is always for profit.