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Dallas Habitat for Humanity helps staff purchase homes


Rebecca Thompson was about to sign a lease for an apartment with a friend in early 2020 when businesses started shutting down because of the COVID-19 pandemic. So instead, the 34-year-old decided to stay with her parents to save money. But with home prices skyrocketing in Dallas, she thought she’d never be able to buy her own home.

That changed suddenly in July when her employer, the Dallas Area Habitat for Humanity, announced a new employee benefit: $13,500 in the form of a forgivable loan to help with a down payment or closing costs on a home.

“After that meeting, there was a buzz in the air,” Thompson says. “Everybody was so excited.”

Thompson, who works in the nonprofit’s fundraising office, expressed her interest right then and there. “I was literally the first person,” she says. “I don’t even think the slide had gone off the screen.”

To receive the down-payment assistance, Thompson is taking part in a program for first-time home buyers, just like the one Habitat offers to its clients. Counselors break down her finances to help her see what she can afford and how she can save. They explain down payments, closing costs, mortgage insurance, what to look for in a home inspection, and other costs and complexities of home buying and ownership.

Thompson hopes that with the down-payment assistance she can find a home with two bedrooms so she can have a home office. Plus, her cats and lizard could use some extra space. She loves growing her own food, so outdoor space for a garden is important, too.

Thompson is excited about the prospect of moving out of the cramped bedroom in her parents’ home. “It’s been hard for them to watch me struggle a little bit in this economy,” she says. “They’re excited that I’m going to be able to take this step.”

The Dallas Habitat received a $9 million gift from philanthropist MacKenzie Scott in March. That sum of money — more than the $7 million in total contributions it raised in 2020 — allowed the group to think big and creatively, says CEO David Crawford.

The organization was developing a program for corporations that would enable them to refer employees to Habitat for counseling on home buying and, in some cases, down-payment assistance. The group decided to use some of the Scott gift to develop a similar program for its own employees. It will spend the rest to purchase land on which to build homes for its clients.

Crawford says that while employee turnover has not been unusually high, hiring new employees has been a challenge given very low unemployment rates. After years of increasing home prices and now higher interest rates and inflation, it was clear that homeownership was a challenge for many of the group’s staff. He hoped a program to help put homeownership in reach would make more employees want to stay and encourage new ones to join the organization.

While the program has costs, they are less than they seem. Recruiting a new employee can cost $7,500 to $12,500, he says. “If this helps us recruit someone and bring them in more rapidly and then keep them, it’s been money well spent,” he says.

The program is limited to employees who make less than 120% of the Dallas area median income — $116,800 a year for a family of four. Depending on employees’ income, they might qualify to buy a home built by the Dallas Habitat or a home on the open market. The loan is forgiven if the employee stays at the organization for five years. Each year, 20% of the total loan amount is forgiven; if the employee leaves Habitat in less than five years, that person must repay the remaining balance on the loan.

The group also works with lenders that provide home loans requiring down payments of 0 to 3.5% of the cost of the house. Some of the lenders also have their own down-payment assistance programs, says Blaine Cowart, the group’s vice president of homeowner services, who designed the employee benefit. Some staff may also be able to take advantage of programs that help them pay a lower interest rate on their home loan. So far, three employees are under contract to buy homes — two of them built by Dallas Habitat.

“There has been a ton of excitement about this program,” Cowart says. “I have had countless employees come and visit me personally and share their interest in it.”

It’s no surprise that employees are so interested. A July report from RE/MAX found that Dallas had the highest home appreciation in the country. With climbing interest rates, the housing market has slowed, but in Dallas home prices are still up 14% over September of last year.

Affordable homes have virtually disappeared from the market in the Dallas area. In the third quarter of 2017, 31.6% of homes sold for less than $200,000, according to data from the Texas Real Estate Research Center at Texas A&M University. In the third quarter of 2022, only 4.5% did.

Prices rose so fast because competition for homes was fierce, says Todd Luong, a realtor with RE/MAX DFW Associates. He says that since the pandemic lockdowns began in 2020, out-of-state buyers have flocked to the Dallas-Fort Worth area, drawn by the once-affordable housing market.

Investors also began buying up property, particularly big new firms like Opendoor Technologies and Offerpad, which make all-cash offers. Luong says last year 50% of Dallas home sales went to institutional buyers who fix up the homes and resell or rent them. But the swift increase in mortgage interest rates has caused investors to pull back, he says. Homes, particularly more affordable ones, are staying on the market longer, which gives buyers more choice — albeit at higher monthly costs, thanks to higher interest rates.

The Habitat program targets a persistent problem for people with low and moderate incomes — the difficulty of saving for a down payment, says Clare Losey, an assistant research economist at Texas A&M’s Texas Real Estate Research Center. She says the current housing market and the economy have only exacerbated the problem. People with the lowest incomes are often the most sensitive to interest rate increases because they cannot absorb higher monthly costs. But any additional financial help means a lot.

“A program like this that Habitat is providing for its employees is a huge benefit,” she says. “Saving $13,000 on a household income of, say, $50,000 is going to take years and years.”


This article was provided to The Associated Press by the Chronicle of Philanthropy. Jim Rendon is a senior writer at the Chronicle. Email: [email protected]. The AP and the Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.