Publications & Resources

July/August 2008
Focus: Lending & Credit

Homes Within Reach

By Wendy Ross & Ed Obuchowski

In February, WIB member Bank of San Francisco launched its new employer-assisted housing program called Homes Within Reach. It is designed to provide solutions for the San Francisco Bay Area’s lack of affordable housing, which is hampering efforts by companies, hospitals, schools and nonprofits to recruit and retain employees. The describe the program below.

The lack of affordable housing in such urban centers as the San Francisco Bay Area is a major issue for companies, hospitals, schools and other non-profit organizations in their efforts to recruit and retain employees. The urgency to address this problem became increasingly apparent to our bankers as they heard clients and prospects continually voice their concerns over the high cost of recruiting, training and then losing top-performing employees due to those employees’ inability to purchase a home in the Bay Area.

We have designed a program in which banks play a central role in providing one of the many possible solutions to this key challenge. Under our program, a bank gets involved in all of the steps of the process, including:

  • Educating employers on the concept and possibilities of Employer-Assisted Housing programs. With input from the bank, an employer designs its own unique Employer-Assisted Housing program and establishes criteria for its employees to meet in order to qualify. Programs may entail employers giving their employees lump-sum grants or loans secured by second deeds of trust to assist with mortgage loan down-payments, or they may provide their employees with grants paid over a period of years to boost the employees’ income for purposes of mortgage loan qualification.

  • Educating/counseling participating employees on home ownership and either providing the mortgage loans directly or linking the employees with mortgage lenders.  In the spirit of helping to solve the high cost of entry into home ownership, we have found that it is helpful if the mortgage lender is willing to absorb some of employees’ closing costs.

  • Servicing the employer loans secured by second deeds of trust on the homes purchased by the employees.  We have found that while employers may want to assist their employees by providing financing, they don’t want the burden or responsibility of handling the on-going servicing of those loans. They would much rather turn the paperwork over to a bank.

  • Offering qualified employers credit facilities to fund their employee loan pools.  This provides tremendous leverage to the employers in terms of their being able to assist as many of their employees enter the housing market as possible. 

  • Introducing employers to real estate developers who are willing to discount prices on housing units sold to employees participating in Employer-Assisted Housing programs.  Cooperative developers can be a key element in helping people access affordable housing.

We see Employer-Assisted Housing programs as a win for all parties. Employees benefit from an improved quality of life and the opportunity of homeownership in an area near their place of work. Employers benefit by being able to attract and retain highly-valued employees, having less employee turnover and realizing the cost-savings of a stable employee base. Developers benefit by having a faster sell-through of their housing inventory. The facilitating bank certainly wins by having helped its community and by having provided a major “value-added” service to its business, hospital, municipality, school or non-profit clients and to those clients’ employees. It’s one of the ways in which a bank can help make the American dream of homeownership come true!

Wendy Ross is executive vice president, and Ed Obuchowski is president & CEO for Bank of San Francisco. Ross may be reached at 415-744-6712 or wendy.ross@bankofsf.com, and Obuchowski may be reached at 415-744-6701 or ed.obuchowski@bankofsf.com.

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