One proven strategy for stabilizing and revitalizing neighborhoods is increasing homeownership rates. Employers who want a stable workforce sometimes consider implementing Employer Down Payment Assistance programs.
The majority of employer-sponsored programs offer a loan for prospective employees to assist down payment, closing costs or mortgage points associated with buying a home in the designated target area. These loans are forgiven after a set time period (often 5 years), as long as the employee both lives in the home and works for the employer during that period. Employees may also be expected to comply with any additional parameters the employer sets for the terms of the loan, such as eligibility requirements or home buyer’s counseling courses.
These programs have been gaining popularity all across the country, from Cleveland to Dallas to San Francisco, as they often help recruit and retain talent within the community, increasing homeownership and strengthening the local economy. A large part of the appeal is that Down Payment Assistance programs are highly customizable and can be adjusted to best meet the capacity and needs of the neighborhood.
Down Payment Assistance isn’t cheap, but the employers who have chosen to implement them find that the relative cost is lower than other attraction efforts in an economy with low unemployment rates. Some cities even offer to match employer funds to lower costs, showcasing their priorities by helping attract long-term residents and allowing employers to offer the funds as a grant instead of a loan.
Successful Examples of Employer Programs
Cleveland Clinic
Provides employees with up to $20,000 in forgivable loans to purchase homes, and an additional $10,000 loan is available to “working families” whose total household income is less than $150,000.
The loan can be used for down payment, closing costs or mortgage points associated with buying a home in a designated target area and it’s forgiven if the borrowing employee continues to work for Cleveland Clinic and occupy the residence for 60 months after purchase.
Johns Hopkins University and Hospital – Live Near Your Work program
Offers grants up to $17,000 with government-matched funds toward a down payment and closing costs associated with buying a house in designated city neighborhoods.
Applicants must take a homeownership course and a one-on-one counseling session with an approved agency prior to making an offer on a home.