Nearly everyone who worked for Columbia Vista Corp., a Vancouver, Wash., sawmill operator, was a renter in 2003, when HomeStreet Bank in Seattle helped it set up a mortgage program.
Now eight of the 80 employees have bought homes and taken out mortgages with HomeStreet - and Sharon Lewis, who owns Columbia with her husband, gives much of the credit to the $1.7 billion-asset, privately held thrift.
It helped that Columbia antes up $5,000 toward the down payment for anyone who has worked at least three years for the company. But the thrift's active involvement helped Columbia take the plunge, Ms. Lewis said.
"They're just so excited when they talk about the value of owning a home," she said. "It's infectious."
To generate loan customers a growing number of banks are offering customized mortgage programs that employers can offer their employees. HomeStreet's includes discounts, seminars, and help in finding special mortgage deals.
Vice president Dianne K. Wasson, who directs HomeStreet's program, said the combination is needed to turn lifelong renters into homebuyers - and is why the thrift has been able to make so many loans. Since 1994 it has made over 4,500 mortgage loans, for a total of $885 million, to employees of municipalities, school districts, businesses, nonprofits, and members of labor unions.
"This is one more benefit an employer can offer to try to entice people to come and stay working for them, at no cost to the employer," Ms. Wasson said. "It also provides us with a source of volume that we otherwise would not have."
In 2003 a team of no-commission HomeStreet lenders visited the sawmill and threw a party for its employees to introduce its Hometown Home Loan program, which features discounts on loan fees and closing costs.
The team followed up with a series of credit counseling and first-time-homebuyer seminars and helped the sawmill's employees apply for special mortgage deals offered by nonprofits and government entities.
Now the team comes to the sawmill every six months to hold seminars and encourage more employees to become homeowners.
Beth Marcus, director of work-force housing at Fannie Mae in Washington, D.C., said HomeStreet's program is a standout because it is so comprehensive - and successful.
"Many banks have partnerships with companies, but HomeStreet really gets their employees to buy into it," Ms. Marcus said. "HomeStreet goes out to the companies and talks directly to employees, and I don't think I've ever seen anyone else provide the same kind of mentoring."
Fannie Mae buys the loans in HomeStreet's Hometown program. The government-sponsored enterprise also offers guidance to banks on how to create similar employer-assisted housing programs.
Ms. Wasson said HomeStreet will work with any organization with enough employees to make it worthwhile for its team to offer services onsite. Its typical loan fee for participants in such programs is 0.5%, half the ordinary percentage on most mortgage loans, she said.
HomeStreet has also negotiated discounts with real estate agents, home inspectors, escrow agents, and others involved in the closing of loans. Participants usually save between $1,200 and $1,700 on closing costs, Ms. Wasson said.
HomeStreet's seminars for first-time homebuyers feature advice from lenders, real estate agents, home inspectors, and insurance people. Lenders also help participants find down-payment assistance, below-market lending programs, and other special deals offered by nonprofits, municipalities, states, and Fannie Mae.
For example, under a program that HomeStreet developed with Fannie and Seattle, anyone buying a home there can get a loan with a 3% down payment. The program is meant to encourage people to live closer to work and use their cars less. Discounts are also offered on transit passes and bicycles.
