When Seattle's police and fire department employees wanted to find homes closer to their work, they turned to HomeStreet Bank. In response, the bank, which recently won a national award, launched the Hometown Home Loan Program.
Since that launching in 1994, the program, which provides discounted home loans, has expanded to partner with more than 40 employers in three states and has helped more than 6,000 people save over $7 million in closing costs and fees.
Seattle's Office of Housing adopted the program, and it later expanded to include all employees working for the city of Seattle, Seattle School District and Seattle Community College.
"The program helps to accomplish several of the city's goals, including increasing the rate of homeownership in the city limits, said Diane Wasson, vice president and manager of the bank's Affinity Lending Center.
The 85-year-old HomeStreet Bank recently received an award for "helping to achieve homeownership" from the America's Community Bankers, an independent national trade organization for community banks.
"Homeownership rates in the city of Seattle have lagged quite a lot behind the national average of cities of this size for some time; we have a pretty severe affordability problem here," Wasson said. "The city felt any program that helped to encourage homeownership was valuable to city-based employees who were looking at purchasing a home in the city limits to help reduce long commutes and traffic congestion."
Employers participating in the loan program see it as a benefit, since employees who are homeowners tend to be more stable and stay longer, reducing turnover, Wasson added. Several employers use the loan program as a recruiting tool.
New affinity partnerships have been created in King, Pierce and Multnomah counties. Partnerships also were developed with the city of Portland, Seattle and Portland Housing Authority, the University of Washington, Fred Hutchinson Cancer Research Center and several school districts.
HomeStreet Bank's Affinity Lending Center is voluntary for employees of partnering organizations and doesn't receive any public subsidies. Participants in the program have access to varying mortgage products and receive a variety of benefits.
The Hometown Home Loan Program offers reduced closing costs for all home loan programs, special loan programs, free homebuyer education, access to down payment assistance, low down payment programs, easier qualifying ratios and no income restrictions.
Classes on managing credit and the different types of loans available also are offered at the workplace, Wasson added.
Wasson stressed that the homebuyer education is one of the program's most important components.
"Oftentimes people don't know how to get started; they assume they aren't going to be able to qualify; and they're not familiar with all of the different new programs and tools that are available to help them to afford houses. So our ability to go into the workplace and educate them on how they might get on the path to homeownership is really important," Wasson said.
Although the bank has programs to help reduce the cost of financing a home, it can't lower the cost of the home, noted Kathryn Williams, community relations director for HomeStreet Bank.
"We recognize that one program doesn't fit everyone, so we offer a variety of programs both for first-time homebuyers to people moving into their second or third home," Williams said.
"We also recognize there are people who need reverse mortgages or a home equity loan where they own their home but need more cash to live on. We try to meet with each potential homebuyer, sit down and evaluate what their needs are and see how to best tailor a loan program specifically for them."
For those who aren't financially ready to buy a home, the bank will work with people to put their credit in shape and help them with budgeting and savings accounts so that they are actually ready to buy a home, Williams added.
The Hometown Home Loan Program is available only through HomeStreet Bank Affinity Lending Centers in Washington (Seattle, Downtown, Mountlake Terrace, Ballard and Tacoma), Oregon (Portland, Salem) and Hawaii (Honolulu).
In addition to helping individuals find the right loan, HomeStreet's long-term focus is to partner with community organizations that address the need for affordable housing. The HomeStreet Community Housing Award Program, which grants $10,000 awards to nonprofit organizations meeting housing-related needs for low-to-moderate income people, has awarded $230,000 since the program began in 2003.