2007-09-26 / News

Help wanted, home provided

Employer-assisted housing programs are helping workers have their own home to go to when they punch out
By Patricia V. Rivera CTW Features

Mike Romano couldn't have picked a better time to glance at a poster at work that described an employer-assisted housing program.

The manager at a Delaware poultry-processing plant, who was in the market for a new house, planned to make an offer on a property just a few miles away from work. The housing initiative promised to help with closings costs if he attended a homeownership course.

Even though Romano had previously owned a home, he realized after the course how little he really knew about the process.

"It was the best thing I could have done," he says. "I was able to get another lender and drop the interest rate offered to us by 2 percentage points." He also received $2,000 in grants from his employer and the state of Delaware to help with the down payment.

Employer-assisted housing programs have been around for more than 20 years. They're known by various names including Live Near Your Work. Employers collaborate with nonprofit organizations, as well as public sectors, to deliver the benefits.

Dan Hoffman, a Philadelphiabased expert on employer-assisted housing, says survey results show that as many as one in 10 employers offer the benefit. He expects the number of participants to rise in coming years as more employers learn of its value.

Local and state governments throughout the nation also are trying to entice more employers into offering housing assistance.

Several states support the initiative by providing matching funds.

More states are discussing the virtues of the concept at a legislative level. Nationally, Sen. Hillary Clinton (D-NY) has reintroduced the Housing America's Workforce Act. Senate Bill 1078 proposes to create a federal tax employer credit to support employer-assisted housing programs.

Employer-assisted housing offers benefits to both employers and employees.

Robin Snyderman, housing director for the nonprofit Metropolitan Planning Council in Chicago, describes it as an economical way for employers to increase employee retention and attendance, while workers decrease the stress and headache of their lengthy commutes.

"EAH serves as a form of reinvestment in their respective communities," she notes.

Meanwhile, employees receive help with down payment and closing costs and homeownership insight. Housing counselors who work with the employers also can help buyers improve their credit scores and histories.

Hoffman says that employerassisted housing differs from other employee benefits in that it has long-term implications. As a result, employees often agree to certain conditions, such as passing on other benefits like educational-reimbursement programs and staying with the employer for a pre-agreed time.

Not all employer-assisted housing programs look alike, Hoffman adds. The benefits often reflect an employer's commitment to improved retention. If they spend too much on recruiting or training, they have reason to invest more money on workers.

Most organizations offer grants or deferred loans while as some employers provide mortgage guarantees and shared- appreciation mortgages. Still other employers buy land, or contribute to land trusts, as a step to new construction for its employees.

"More-expensive markets require more-involved and more-expensive solutions," he says.

Employers also have responded to the housing needs of their workers through rental-assistance programs. Experts say the approach does not tie workers to their community or employer, a goal of the program for many organizations.

Hoffman says there are other tangible benefits to the program that aims to place workers near their work. Studies have shown that reducing commuting time increases employee morale and productivity by cutting down on late arrivals and stress.

"The employer knows that when it's time to start the line, it won't have employees stuck in traffic or in bad weather," he says.

Employers don't spend as much on fuel to get to work, which helps the pocket book and the environment, he adds.

For Romano, the education and grant provided him with a greater peace of mind. He feels likes a more informed homeowner. And he's saving money in two ways. First, his housing counselor helped him obtain a better loan with a lower interest rate. Then, she encouraged him to place a larger down payment as a way to avoid private mortgage insurance, required by some lenders to protect more than 80 percent of the home cost.

"Sometimes you don't realize how much you don't know about buying a home until someone opens your eyes," he says. "I see that as the greatest benefit of the program."

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