In January, a White House official floated a plan to let Americans tap into their 401(k)s for housing-related expenses, such as a down payment. It never materialized.
Nevertheless, the plan highlighted an anxiety that weighs heavy on workers’ minds today. Even as they put away savings for retirement, they may struggle to purchase a home.
While the federal government offers tax-advantaged savings plans for retirement and education, no such plan exists for buying a home.
Enter employer-assisted housing (EAH), which refers to programs that subsidize workers’ housing costs. The Bank of New York Mellon Corporation (BNY) is one recent employer to enter this space, pledging down payment assistance to eligible US employees, according to an April 8 statement.
EAH programs are niche, but seen as increasingly relevant in the RTO era.
Corporate players. Typically employers that offer EAH do so in the form of financial assistance, education, or a combination of those two services.
BNY is one recent employer to announce it will launch an EAH program, pledging $6,500 in down payment assistance to eligible US employees making $100,000 or less a year.
Unsurprisingly, EAH is common among employers in the housing business. Fannie Mae gives eligible employees one-time grants of up to $10,000 to purchase a home, while eligible first-time homebuyers working at Freddie Mac are entitled to a $15,000 subsidy. The mortgage-backed securities firms also sell products to employers that want to offer similar benefits.
US Bank takes into account the pain points an employee might encounter in the homebuying process when designing benefits programs for employers, Wendy Morrell, a US Bank SVP who heads up relationship retail home lending, said. If a company has “a really specific type of a compensation structure that is a little more challenging or complex in terms of using income to qualify” for a loan, they might structure the program to take that into account.
Amazon offers a custom mortgage program to its employees through a partnership with US Bank. The program takes into account the particularities of Amazon’s compensation structure, considering an initial stock bonus or restricted-stock units as income, for example, when employees apply for loans.
While some companies seek out hyper-customized EAH programs, others may elect to provide support through educational resources, Morrell said. These resources may help employees navigate issues such as interest rates, inventory challenges, or homeowners insurance.
New entrants. In recent years startups have entered the EAH space, as well, pitching employers on tech-enabled solutions to facilitate the homebuying process.
Foyer, a savings app that markets itself as a “401(k) for homeownership,” started on the direct-to-consumer market. The company recently began pursuing business with employers, too, founder and CEO Landy Liu told HR Brew. It’s now available through Nayya, an AI-powered benefits navigator.
“If you buy a house, you’re going to be so much more sticky as an employee,” Liu said. “It’s actually in the company’’s best interest to help their employees see a future where they can lay down roots.”
Companies pushing RTO strategies have a vested interest in helping workers put down roots near their operations, sources told us.
“Having an incentive for in-person, and to make that a bit easier, is part of their return-to-office strategy,” Michael White, co-founder and CEO of Multiply Mortgage, said. When he first spoke with HR Brew last year, he said some of Multiply’s clients were asking workers to come into the office between four and five days per week.
Multiply, which acts as a mortgage originator on behalf of employees who elect to use the benefit, recently announced it will be available to employers in Sequoia’s PEO network.
White said he’s observed a heightened interest in promoting “holistic financial wellbeing,” outside of simply offering salaries and 401(k) benefits. “Homeownership, I think, has such a big role to play.”
A longstanding, but niche, benefit. Employer-sponsored housing benefits are certainly not new, but they remain niche. As of 2024, just 13% of employees received some form of employer housing assistance, according to a survey from JW Surety Bonds, a bond writer.
Employment is one factor that drives Americans to purchase homes, but not the top factor, according to recent Census data. In 2022, 42% of Americans said they moved due to considerations around housing itself (i.e. wanting a bigger home or a cheaper home), while 27% said they moved for family, and 16% moved for employment.
Housing has long been framed as a personal issue, but it can become a workforce issue if employers lose talent over it, George Fatheree, founder and CEO of ORO Impact, a fintech firm developing homeownership and housing benefits, said.
“If you’re the CEO of a company, and your star candidate declines the job offer because of the cost to move their family…that’s a workforce issue,” Fatheree said.
Fatheree hypothesized that employers may steer clear of benefits like down payment assistance because they don’t have the expertise to administer such a program, which can present complexities around areas like taxes and payroll.
Entrepreneurs like Fatheree are seeking to fill in knowledge and expertise gaps that exist for employers that want to support workers’ housing needs. But Landy Liu, of Foyer, said he would be supportive of extra assistance from the federal government, as well.
Should a proposal to allow Americans to use their 401(k) savings for housing ever come to fruition, Liu said Foyer would stand ready to support such transactions. He also said Foyer is partnering with the National Association of Realtors to support policy recommendations for tax-advantaged homeownership savings accounts.
“That’s something we’re pushing in Washington that we’re very supportive of,” Liu said.
This report was originally published by HR Brew.
