However, the new first has to allow your combined loan-to-value (1st + existing 2nd) to go up to 89% CLTV. This is not a given. Your new 1st mortgage will get a conservative appraisal done and they may think your house is worth less than you do, especially in this falling market. So a lot will depend on what your houses appraises for.
Also, what is your loan size? If you are in the jumbo mortgage category, the new 1st mortgage may only allow you to go up to 80% combined loan-to-value.
If your credit union does agree to subordinate the existing HELOC to a new first mortgage, make sure that they clarify, to the degree they can, how long the subordination process will take. Whatever the time frame, be sure to accommodate it with the days you lock on any new first mortgage.
If you have any general questions, consult my blog "The Rules of Refinancing."
Let me know if I can be of service.
Another option would be to ask the credit union to refinance your current first at a competitive rate, as this would make the subordination much more likely.