What is Employer-Assisted Housing?

Employer-Assisted Housing (EAH) helps employers help their workers afford a home near work. The various components of EAH benefits are designed by employers and are as varied as the companies that use them.

Employers benefit

EAH benefits can be designed to work for any type of employer—private companies, public institutions and nonprofit organizations—in any type of market. Employers typically partner with third-party housing organizations to help design and manage EAH benefits, an arrangement that keeps EAH benefits easy to administer and very cost- effective. EAH benefits have been shown to improve recruitment, morale, retention, community relationships and community revitalization, thereby improving the employer's bottom line.

Employees benefit

EAH was historically conceived as a tool for recruiting senior executives, but is now widely offered to employees at all income levels. Many workers today face a persistent disparity between what they earn and what it costs to live, long and costly commutes, and the desire to achieve an improved work-life balance. EAH can address all of these employee concerns.

Communities benefit

When employers are located in or near an economically distressed community, the homeownership and investment that EAH promotes can be a part of anchoring and revitalizing that community. Because EAH strengthens every community surrounding an employer, it can create a bond or improve the existing relationship between an employer and its neighbors.

EAH partnerships and roles


NHS responsibilities explained:

Benefits

Employers offer EAH benefits for many reasons: to give their organization a competitive edge; to attract a quality workforce and keep their employees longer; and to help stabilize communities in which they are invested.

Traditionally, employers have supported their employees through benefits such as health and life insurance, flextime provisions, and employer-supported child care. EAH benefits are looking to give their organization a competitive edge that attracts and keeps a motivated workforce.


“I don’t think it’s any coincidence that System Sensor is one of Honeywell's most productive subsidiaries. Through the EAH program, we’ve figured out a cost-effective way to recruit and retain essential employees. The program is beneficial for everyone because it increases employee morale and ensures a more successful future of the company.”

—King Harris, Former CEO of Pittway Corporation and currently consultant to Honeywell International, Inc.


Determining your EAH budget

Employer-Assisted Housing benefits can be designed to fit both an employer's personnel objectives and budget. These are the options that determine the cost of your EAH benefit:

  • Employee eligibility criteria

    Minimum length of employment or income limits

  • Geography

    Where employees buy homes

  • Downpayment assistance amount

    Often $3,000

  • Level of support from housing counselor
  • Costs and benefits analysis

    Financial incentives for the employer

    Costs to the employer can be offset by tax incentives. The Illinois Affordable Housing Tax Credit (IAHTC), also known as the Donations Tax Credit, provides a $0.50 state income tax credit for each $1 contributed to a qualified affordable housing project. IHDA administers the statewide program and Chicago's Dept. of Planning and Development (DPD) administers the program in the city of Chicago.

    Requirements for application:

    IHDA tax credit household income eligibility Income limits change periodically. Check IHDA's website for the updates. Cook, DuPage, Lake, Kane, McHenry, and Will Counties
    Household size 1 person 2 people 3 people 4 people 5 people 6 people 7 people 8 people
    Income limit $60,840 $69,600 $78,240 $86,880 $93,840 $100,800 $107,760 $114,720

    For employers with limited or no state tax liability, such as nonprofit hospitals, universities, or municipalities, the law allows for a transfer of the tax credits. Employers "sell" the credits to an individual or corporation that has a state tax liability. In 2013, the market rate for tax credits was approximately $0.80 on the dollar.


    $57,554

    Average household income for University of Chicago employee

    $194,940

    Average purchase price for employees receiving EAH benefits


    Profile: University of Chicago Employee

    Natasha Rodwell and children

    Photo by Emily Cikanek

    Natasha Rodwell and her children

    Natasha Rodwell

    Radiology Licensed Practical Nurse, employed since 2004

    By the age of 28, Natasha Rodwell determined that she would buy her first home at the age of 30. Employed with the University of Chicago for a decade, Natasha worked her way up to a radiology licensed practical nurse. "I just got tired of renting," Natasha said.

    With the help of EAH benefits, Natasha purchased a condo in 2011 and now lives a 10-minute walk from her job in an area that she and her children really enjoy. Homeownership has been a great source of pride for her. "I enjoy being a homeowner because it's mine. And you take pride in what you own. And you respect it … It [EAH] helped provide a roof for me and my children, a safe place for us to live," she said. Natasha described the University of Chicago's EAH housing counselor as "always available … response time is fast … Very courteous, respectful, available, knowledgeable."


    “Over the past decade, our Employer-Assisted Housing program has proven to be a distinct opportunity for the University of Chicago and University of Chicago Medicine to partner with our surrounding neighborhoods to increase opportunities for investments. When considering our institutional goals to attract and retain the best talent and contribute to the vitality of the nine communities near our main campus, Employer-Assisted Housing just made sense. We look forward to the continued evolution of the program and its impact to both the University and the Mid-South Side.”

    —Derek Douglas, VP of Civic Engagement, University of Chicago

    How to establish an EAH program

    Interested in establishing an EAH benefit? You're three steps away.

    Starting an EAH program requires some upfront decision-making to establish the scope, plenty of communication and education, and knowledge and assistance from local housing counselors.

    1. 1 Planning

      Determining employer's and employees' needs and customizing the EAH program

    2. 2 Communication

      Notifying and educating employees about EAH benefits

    3. 3 Implementation

      Providing counseling and financial assistance for housing


    1 Planning

    Determining employer's goals

    Since EAH is a tool to help support an employer's goals, it is important to establish those goals from the outset. Growth, retention, community stabilization or a mix of all three can drive the design of a customized EAH benefit.

    Examples of employer goals include:

    Determining employees' needs

    When determining how to design an EAH benefit, it is important to understand the needs of the employees. Identifying these needs will require discussions with senior leadership and human resources to gather demographic information about the workforce and to make some inferences about how to improve their quality of life. Employers with a robust human resources staff may have this information readily available; others may not, in which case it may be necessary review census data to make inferences about the employer's workforce.

    The demographic data that would be helpful to have in determining employee needs includes:

    Dear Employee,

    In our continued effort to bring value to your work life experience at Employer Company, we are evaluating our role in helping employees own a home closer to work. This effort is part of a larger program in partnership with the Metropolitan Planning Council, Employer and the local REACH Illinois partner. Our common interest is to promote homeownership options for the local workforce.

    In an effort to better understand your interests and needs, we have prepared a short housing survey. If you are interested in becoming a homeowner for the first time, please take a few minutes to complete the attached survey and drop it in the "Homeownership Program" box located at the cafeteria before date. The information contained in the survey is strictly confidential and will be used only to evaluate how our Human Resources Department can be responsive to employee housing needs.

    Thank you for taking the time to complete the survey. If you have any questions regarding this matter please contact the Human Resources Department. Otherwise, please return your completed survey to the cafeteria drop box by date.

    Sincerely,
    Employer

    Developing a memorandum of understanding (MOU)

    Once these variables have been determined, the employer will work with the nonprofit housing counselor to determine specific benefit design details. These details, as well as the terms of the administration for the nonprofit housing counselor, should be recorded in a memorandum of understanding (MOU) that will serve as the contractual document. These details should include:


    2 Communication

    Once an EAH program is designed, nonprofit housing counselors will work with the employers' human resources (HR) department to notify and educate employees about EAH benefits. HR departments typically have established methods of informing employees about benefits; generally it is best to develop content to distribute through those channels including:


    3 Implementation

    When an employee decides to use his or her employer's EAH benefit, the first step is to connect with the nonprofit housing counselor to begin their EAH benefit application. Once the nonprofit housing counselor has established that the employee is eligible for the benefit, then the employee will be required to participate in a housing course certified by the U.S. Dept. of Housing and Urban Development (HUD).

    HUD-certified housing counseling courses

    All EAH beneficiaries are required to complete eight hours of housing counseling courses sponsored by HUD. The counseling provides an overview of the financial, technical and procedural components to purchase and maintain a home. HUD-approved counseling professionals will help participants develop a personal budget, learn how to establish and achieve financial goals, and understand the documentation required for a home closing. Class schedules and locations vary but can be tailored to be convenient for the employees. Attendees will be issued a certificate upon completion of the counseling. The certificate also may grant employees eligibility for additional government-issued housing funding, which the counselor will inform them of during counseling.

    Employees accessing EAH benefits

    Some employees may participate in housing counseling and decide not to take advantage of the downpayment or rental assistance. Employees who have completed the counseling and wish to receive the downpayment or rental assistance must contact NHS to complete a series of documents, which will secure funding from the employer.

    Documentation

    Documentation is important for employers to realize the full benefits of EAH. For example, to apply for state tax credits employers must report on the details of their EAH investments. In Illinois, EAH investments must have been made to support households earning no more than 120 percent AMI to be eligible for tax credit application. It is typically suggested that employers wait until they have made an investment of approximately $100,000 before applying for tax credits. This may take a number of years, depending of the size of the employer and scope of their EAH benefit.

    Another benefit of maintaining documentation is program evaluation. After a number of years, many employers may wish to review how successful EAH benefits were in helping them to realize their intended goals. Well-kept data and documentation (typically maintained by the nonprofit housing counselor) allows employers and housing counselors to analyze the impacts of EAH on matters such as retention, recruitment rates and commute times to work.

    Documents

    The following is a chronological list of documents that employees must complete, submit or be provided to receive EAH benefits. Some of these documents are typically needed for any closing, while some are specialized.

    1 Planning

    Document Author/source Submits to

    Specialized Memorandum of understanding (MOU)

    Dictates terms of EAH administration and benefits.

    Download example

    NHS and employer Employer

    Specialized Eligibility Application

    Verifies employee eligibility to receive EAH benefits.

    Download example

    NHS

    With approval from employer

    NHS

    Specialized Release of Information

    Grants the employer permission to release information regarding employee's program eligibility.

    Download example

    NHS

    Signed by employee

    NHS

    Specialized Intake Form

    Records client's information for contact and program purposes

    Download example

    NHS

    Signed by employee

    NHS

    Typical 2 most recent paycheck stubs

    Verifies employee's income.

    Employee NHS

    Typical Most recent W-2 form

    For income verification purposes.

    Employee NHS

    2 Communication

    Document Author/source Submits to

    Specialized Eligibility announcement letter

    Outlines the eligibility of EAH benefit loan between the employee and the employer.

    Download example

    NHS Employee

    3 Implementation

    Document Author/source Submits to

    Specialized HUD-approved counseling class certificate

    Certifies that have successfully complete the eight hour HUD-approved course.

    Download example

    NHS Employee

    Specialized Forgivable loan agreement

    Outlines the terms of EAH benefit loan terms between the employee and the employer.

    Download example

    NHS

    With approval from employer

    NHS

    Specialized Promissory note for forgivable loan

    Outlines the terms of EAH benefit loan terms between the employee and the employer.

    NHS

    With approval from employer

    NHS

    Specialized Closing request form

    This application is a request to the employer to send EAH benefit funds to the title company that is handling the closing.

    Employee NHS

    Specialized EAH program approval letter

    Announces to employee that their application has been approved for the receipt of EAH benefits.

    NHS Employee

    Specialized Funding letter

    Verifies that the employee has satisfied all eligibility requirements to receive EAH benefits and requests that the employer send funds to the title company that is handling the closing.

    Download example

    NHS Employer

    Specialized Fund wiring instructions

    Informs the nonprofit where to wire funds.

    Download example

    Title company

    To employer

    Via NHS

    Typical 1003 loan application/multiboard residential real estate contract/sales contract

    Documents issued by employee's lender & seller that will outline terms of the upcoming sale.

    Mortgage lender

    Lender

    NHS should retain a copy

    Typical Good faith estimate

    Document issued by employee's lender that will outline terms of the upcoming mortgage.

    Download example

    Lender

    Employee

    Receives this directly from the lender

    Typical Truth-in-lending disclosure statement

    Document issued by employee's lender that will outline terms of the upcoming mortgage.

    Download example

    Lender NHS

    Typical Mortgage approval letter

    This document details the terms of the approved mortgage.

    Lender

    Employee

    Receives this directly from the lender

    Typical Title commitment

    Informs all parties the terms of the title insurance.

    Title company

    To employer

    Via NHS

    Typical Settlement statement

    Informs all parties the details of the sale.

    Download example

    Title company

    To employer

    Via NHS

    Typical Invoice to employers

    Monthly or quarterly payment for EAH administration.

    Download example

    Title company

    NHS

    Employer

    Learn more

    Contact: Karen Woods, Director
    kwoods@nhschicago.org - 773.329.4186

    References

    1. Prudential Relocation. North American Trends Survey: Exploring Best Practices in Employee Mobility, September 2006.
    Neighborhood Housing Services Chicago 1279 N. Milwaukee Avenue
    4th Floor
    Chicago, Ill. 60622
    P (773) 329-4111 F (773) 329-4120 homeownership@nhschicago.org
    Helping create competitive, equitable, and sustainable communities

    Neighborhood Housing Services is a nonprofit organization established in 1975, NHS is committed to offering Chicago residents affordable resources so they can buy, fix, and keep their homes. We partner with residents, block clubs, neighborhood organizations, financial institutions, the City of Chicago, insurance companies, corporations and foundations so that families can protect and preserve their single biggest investment-their homes. Our mission is creating opportunities for people to live in affordable homes, improve their lives, and strengthen their neighborhoods. Read more about us »

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