Homeownership has many benefits, but they do come with a cost, and for most it can be the biggest purchase you will make in your life. How do you come up with the down payment? Some employers are offering their employees more than vacation and health benefits by implementing and maintaining an Employer-Assisted Housing program (EAH). 

EAH was born around 1980, when some employers began offering grants and loans that could be used to cover some of the cost of buying a home. To make this benefit attractive to employers, states such as Illinois have offered tax credits to companies that offer housing assistance. The Housing America’s Workforce Act, modeled after this Illinois tax credit, has been reintroduced before Congress. The bill, which was first introduced in 2005, will offer a 50% tax credit for every dollar an employer spends on its EAH program, will make the down payment tax exempt for the employee, and will provide financial support for nonprofits that facilitate the program. Many politicians have supported the bill in the Senate and House, but whether the bill will make it to law this time remains to be seen. Nevertheless, many heroes of the EAH program are making a difference and helping create homeownership. 

Illinois has a very successful program called REACH–Regional Employer-Assisted Collaboration for Housing. This collaboration consists of the Metropolitan Planning Council, Housing Action Illinois, and more than a dozen REACH partners. REACH partners, a network of nonprofit housing experts, administer the program for the companies. Since 2000 the program has helped to put more than 1,000 employees in homes. 

REACH and many others in the U.S. see the benefit of EAH for the employer and the employee. It is the ultimate win-win situation.

Employer Advantages: 

• Helps employers recruit and retain employees, thereby lowering turnover and training cost
• Reconfigures and reduces the cost of other benefit
• Increases employee dependability, loyalty, and morale
• Improves community relations

 Employee Advantages:

• Down payment and closing-cost assistance 
• Assistance with credit history 
• Ability to live closer to work
• Allows them to build wealth
• Preparation for homeownership with seminars and workshops

“I would have had to wait a little longer without the funds–a couple of months or so–to save for the rest,” says Tracy Kirby. Tracy is the assistant branch manager for Citizens Bank, a division of Citizens Financial Group, at the Stop & Shop North Smithfield, Rhode Island, location. Tracy had the honor of being the bank’s three thousandth Home Buyer Assistance Program recipient this year. Citizens Financial Group has had a successful program for more than five years and has granted about $15.4 million in forgivable loans. Tracy, a two-year employee at Citizens, bought her first home with her fiancé Michael Desrochers in Woonsocket, Rhode Island, this past January. The Home Buyer Assistance Program gave her a $5,000 forgivable loan after five years, if she stays with Citizens. She put down $4,000 toward the down payment and $1,000 toward the closing costs. “It is a nice bonus to working at the company. Its assistance program shows they care and that they want their employees to be happy. What a great incentive to stay with the company!” Tracy says. 

 “Affordable housing is a primary concern in many of the communities we do business,” says 
Katherine F. McKenzie, group executive vice president and chief human resources officer for Citizens Financial Group, which operates throughout New England, the Mid-Atlantic, and the Midwest. “By providing our colleagues with a Home Buyer Assistance Program, we help ease the financial burden associated with down payment or closing costs. The program is one of many ways we let colleagues know how important they are to us, how much we value their work, and how committed we are to meeting their needs. In return, we are rewarded by attracting and retaining the very best colleagues.” 

Yale University in New Haven, Connecticut, understands the need to help neighborhoods retain prospering families, support existing residents, and attract new residents. To help answer these needs and to encourage increased homeownership, they established the Yale Homebuyer Program in 1994. 

The program offers Yale employees $25,000 to purchase a home in several neighborhoods in New Haven. So far the program has rewarded 793 home buyers. The program has been a model for other employers in New Haven as well and has encouraged them to implement their own programs. Not only has the program successfully created homeownership, but the university has also won awards from the Environmental Protection Agency, because the program encourages employees to live in the same city in which they work, which decreases commuter traffic and pollution. 

Organizations such as the Connecticut Housing Finance Authority encourage employer participation for its programs. Programs such as the Urban Rehabilitation Homeownership Program foster homebuyers who purchase in the Connecticut cities, but for private sector employees, meaning those who do not work for the state, to participate in the program, their employer must contribute financially toward the application. 

Many resources exist to help employers and organizations start home-buying assistance programs. Dan Hoffman, an advocate and facilitator for EAH, says, “Talk to local housing organizations about programs that state or local governments are offering.” 

Freddie Mac has made a commitment to help working families overcome barriers to homeownership such as lack of information about the home-buying process, impaired credit, insufficient funds for a down payment, and a shortage of affordable housing. Its Workforce Home Benefit program has tools and assistance to administer an EAH program for employers. 

Homeownership is about community, and each part of the community can help make a difference. EAH has been a productive and successful means in many states.

Sources:

Federal Reserve Bank of Boston–Public and Consumer Affairs Department: www.bos.frb.org
Freddie Mac: www.freddiemac.com or 800-FREDDIE
Employer Assisted Housing: www.eahousing.com
REACH Illinois Employer Assisted Housing: www.reachillinois.org
Connecticut Housing Finance Authority: www.chfa.org
Citizens Financial Group: www.citizensbank.com
Yale New Haven: www.yale.edu
National Low Income Housing Coalition: www.nlihc.org
National Housing Conference: www.nhc.org