Top employers are helping employees maximize the value of homeownership

It’s a win-win situation: employers help employees make the most of homeownership — even in small ways — and workers may feel even more loyal to them. Plus, employees who happily own and maintain their homes are far less likely to relocate to an area where they find themselves considering a job change.

Homeownership can be a major contributor to employees’ overall financial well-being, security, and stability, all of which can add to their productivity and overall satisfaction at work. And the organizations known for winning today’s top talent have connected the dots between the above homeownership benefits and the positive workforce impacts — like increased productivity and talent retention — that often result.

Read more: The top 10 cities where hiring is booming

Today, the need for employer support — and the potential business advantages that come with providing the right blend of homeowner benefits — are greater than ever thanks to skyrocketing home prices and relatively stagnant wages making it harder for employees to afford homeownership. And COVID-19 has only added to the problem. Homebuyers fleeing crowded urban areas have helped overheat home sales in suburban and rural areas. That has driven prices up even further and locked out would-be buyers, especially those who have been hit financially by the pandemic.

Current market conditions, paired with the long-tail implications of COVID-19, have underscored how important it is to ensure employees who already own a home maintain good financial posture, too. Employers are prioritizing enhanced awareness around the financial implications that can come with major homeownership milestones, like selling, refinancing, or renovating a property; or understanding how the value of their home is changing amidst today’s volatile market conditions.

Read more: Benefits in action: How one employee went from financial stress to financial security

Offering homeownership benefits can help. Leading employers have already identified the link between homeownership and talent retention, and are introducing homeownership benefits to help build a loyal, productive workforce that can further advance their business objectives. A recent surge in relocation — driven by the recent, widespread transition to remote work around COVID-19 — makes these benefits even more relevant as many companies juggle the many considerations that come with a transition to managing and retaining a dispersed workforce.

For those employees who have opted to stay near the office, having an opportunity to leave nearby usually means reduced commute times, which translates to employer benefits like an uptick in productivity and increased job satisfaction — both of which can benefit overall retention rates. These benefits are underscored by long standing homeownership benefits programs that existed even prior to recent trends:

• Facebook, for example, offered cash incentives to employees buying or renting homes close to its headquarters in Menlo Park, Calif. 
  
• In Indiana, the tomato processor, Red Gold, pays five percent of individual down payments (up to $10,000) for employees who live near the company’s facilities. 
  
• And until 2019, Yale University gave permanent university employees access to programs that offer up to $30,000 over several years for a home in certain areas of New Haven in order to strengthen communities near campus.

Of course, it’s important to study your workforce demographics, and any analytics you have available through your existing financial well-being program — this should offer an aggregate snapshot of employee-selected goals, credit score monitoring, and other insightful data points — to help gauge which of the following benefit types might be most fitting for your workforce.

Homebuyer / Homeowner education and counseling

Empowering employees with knowledge is one of the most impactful — yet cost-effective — benefits companies can offer. Consider pairing up with mortgage experts, financial counselors — and any others you might have access to through your financial well-being benefits partner — to produce on-site or virtual information seminars on various homebuying topics. In addition, banks, mortgage brokers, and real estate brokers in your area may be willing to offer free information sessions at your organization in hopes of generating clients. Or you may find one of the many homebuyer consultants available to help educate your workforce. These programs can provide interested employees with the basics of the local market, different types of mortgages and their rates, mortgage insurance, down payment assistance, legal issues related to homeownership, foreclosure prevention, and much more.

Credit counseling

A good credit score is a key to qualifying for a mortgage with favorable rates. Employer-sponsored credit counseling can help employees learn how to check their credit scores and, if necessary, take steps to improve them. Consider partnering with a respected credit counseling firm to conduct in-house or virtual workshops or allowing employees time off to attend approved credit counseling seminars outside the workplace.

Down payment assistance programs

With home prices as high as they are in many markets throughout the U.S., saving up a down payment of 10 percent to 20% or more can be a barrier to homeownership for many workers. However, employers can help in a few different ways:

• They can offer direct financial assistance the way Red Gold does. This usually entails paying a percentage of an employee’s down payment with a dollar amount maximum.
• Employers can also help employees access government-sponsored grants and low-interest loans designed to help first-time buyers cover down payments and/or closing costs. Although they’re not usually advertised broadly, your state’s housing finance agency and your local housing authority likely have first-time homebuyer programs. Many offer qualifying buyers grants that don’t have to be paid back. Others have low or no-interest loans that often don’t have to be paid back until the house is sold or refinanced. 
• They can also negotiate rate discounts and/or other meaningful incentives that help put money back in employees’ pockets while ensuring they’re partnering with a well-respected and established lender that meets the unique needs of their workforce.
• Companies that offer liquidable stock options as part of the total compensation can also tap the expertise of their financial well-being benefits partner to explore whether their employees could benefit from alternative options associated with stock equity, such as putting vested stock units toward a down payment.

Help finding and paying real estate professionals

Consider partnering with a local bank or mortgage broker to help employees find home financing. In return for the potential mortgage clients, you may be able to negotiate lower closing costs and fees for your employees that your firm also might or might not help subsidize. A partnership between your firm and local realtors can provide workers with special help in the house-hunting process. And a relationship with local real estate lawyers or access to your own firm’s legal expertise can help lower legal fees associated with home buying for your employees. Professional relocation services can help with home buying when an employee moves from one area of the country to another. However, with telecommuting on the rise, this is becoming less common.

Employers can’t be the only resource employees turn to when it comes to buying a home, but being aware and agile enough to support trends around this major financial milestone can be beneficial to both employers and employees, especially as millennials continue to make up the largest share of both the workforce and the homebuyer market, and gen-z’s (who are expected to pursue homeownership much earlier than millennials did) growing influence on the workplace. Not only is it a foundational part of anyone’s financial journey, the potential stability and retention benefits that can result have tremendous business impact.