Employer Assisted Housing Helping Your Employees Feel at Home in your Business Why is housing an issue? • Area’s housing costs are rising faster than.
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Employer Assisted Housing Helping Your Employees Feel at Home in your Business Why is housing an issue? • Area’s housing costs are rising faster than the nation • Incomes and wages are not keeping pace with housing costs • Colorado is losing its competitive advantage as a low-cost area for potential employers • Housing that people can afford is disappearing 2 Why EAH Should Interest You • EAH is a … Win for the Employer Win for Employees Win for the Community 3 A Win for Employers • EAH pays for itself through retention and recruitment costs • EAH sets employers apart - helping them attract the best and brightest • EAH is easy to administer • Bottom line, EAH is good business 4 A Win for Employees • Housing ranks as one of the top 3 most desired benefits • Cash for down payment and closing costs is one of the biggest obstacles to homeownership • EAH helps bring affordable housing within reach for more employees 5 A Win for the Community • More citizens can become homeowners, which means… More housing starts = more jobs = more home sales = broader tax base = better economic environment = better business environment. • The higher the rate of homeownership in a community, the greater the stability of that community. 6 Employer Assisted Housing Design Options • Grant/loan • 401(k) program • Interest rate buy down • Employer paid mortgage insurance • Leveraging other down payment $ • Homebuyer Education 7 EAH Components • • • • • • • First-time homebuyer and/or single head of household Full time (40 hours) employee in good standing Eligible after 6 months of employment Only one EAH loan per household Employee must qualify for mortgage Secured 2nd mortgage Employees at or below 80% of medium income are eligible for $5,000, $10,000, or other amount • No interest on loan unless employee leaves before 5 years; loan rate is prime plus 1% for loan not forgiven • Homebuyer education is required • Hardship clause included 8 EAH Process 1. HR provides info to Employees 10. Close on Home 9. Wire Funds 8. Schedule Closing 7. HR Review/ Approval 6. Make a bid 2. Employee Completes EAH Packet 3. Pre-qualification of employee for a loan at Boulder Valley Credit Union 4. Homebuyer Education 5. House Hunt 9 50% Forgiven EAH Components • Same criteria as forgivable to qualify • 10% of the loan is forgiven each year for five years up to 50% • If employee leaves before 5 years the total loan is due in ? months • If employee sells or refinances the loan is due • Interest rate is prime plus 1% 10 Boulder Valley Credit Union EAH Components • • • • • • Full time employee in good standing Eligible after 6 months of employment Only one EAH loan per household Secured 2nd mortgage Employee must qualify for mortgage Employees at or below 80% of median income are eligible up to $10,000 • Employees above 80% of median income are eligible up to $5,000 11 Boulder Valley EAH Components Continued... • Homebuyer education is required • Median Income for Boulder is $82,000 (80% of median income $65,600) • 20% of EAH loan is forgiven each year over 5 years • No interest on loan unless employee leaves before 5 years; loan rate is prime plus one with 10 year amortization with a five year balloon 12 Benefits to Employer • Assists in recruiting and retaining the best and brightest staff • Dedicated downpayment resources and team to assist staff through home buying process • Dedicated home buying classes 13 Employer Role • HR and designated management assist in developing options • Gateway for communication to staff • HR Limited Role – planning announcement/referring to Boulder Valley Credit Union • Employer web site 14 Action Items • Establish EAH team to work with Boulder Valley Credit Union • Develop EAH with Boulder Valley Credit Union • Modify and/or approve EAH program • Assist in developing marketing materials • HR distribute EAH information 15 Thank you for considering Employer Assisted Housing Helping Our Employees Feel at Home in your Business