Employer Assisted Housing Frequently Asked Questions
What is the Employer Assisted Housing Program?
The Employer Assisted Housing Program (EAH) is an exciting benefit offered by Canisius College to its employees to assist them with the purchase of a home in certain areas of the city of Buffalo. The college will provide assistance in the form of forgivable loans to help employees with down payments and closing costs on a home.
What employees are eligible?
All full time employees of the college excluding (i) employees on probation, and (ii) employees who have been notified that their positions are being eliminated or their contracts are not being renewed are eligible for the program. New employees of the college who currently reside within the eight counties of Western New York must be employed by the college for six months before becoming eligible for the program. For new employees of the college moving to Buffalo from outside the eight counties of Western New York, the waiting period is waived and such employees will be eligible immediately.
Employees covered by a collective bargaining agreement are eligible
College employees who are members of the SEIU Local 200 United are eligible provided their contract includes the benefit.
What properties are eligible?
One or two-family homes that are used as the employee's primary residence are eligible. Condominiums are also eligible.
Homes must be located in those sections of the following city council districts in Buffalo that are included in the Eligible Area:
- Delaware District
- Masten District
- North District
- University District
- Ellicott District
- Fillmore District
- Niagara District
- Lovejoy District
The expanded program includes portions of the Delaware, North and University Districts, beginning with Hertel Avenue to Kenmore Avenue on the north, Elmwood Avenue on the west and Parkside Avenue on the east. The EAH downtown extension includes the areas of the Delaware, Ellicott, Fillmore and Niagara Districts. The extension begins at West Utica and runs south to include the Waterfront, west to include Richmond Avenue, sections of Porter Avenue and Niagara Street and on the east to portions of Michigan Avenue and Main Street.
In addition, there are enhanced benefits under the EAH for homes located in three neighborhoods (Target Neighborhoods) within the Eligible Area:
- Parkside Community Historic District
- Hamlin Park Historic District
- Linwood-Oxford Neighborhood
Where a street boundary is indicated, both sides of the street are within the area.
What are the benefits being offered?
The college is offering assistance in the form of a forgivable loan in the following amounts:
- For homes located within the Eligible Area, the amount of the assistance is five percent (5 percent) of the purchase price of the home up to a maximum of $5,000.
- For home located within the Target Neighborhood, the amount of the assistance is ten percent (10 percent) of the purchase price of the home up to a maximum of $7,000.
How must I use the money?
The EAH benefit must be used for a down payment or any of the customary closing costs associated with the purchase of the home.
What is a forgivable loan?
The EAH benefit is in the form of a forgivable loan. Twenty percent of the amount of the loan will be forgiven each year for five years, provided you have fulfilled all of your requirements under the program. At the end of five years, your obligation to the college will be extinguished.
How does the forgiveness work exactly?
Assume that you purchase a home in the Eligible Area for $50,000. You would qualify for a benefit of $2,500. Assume that you close on the purchase of that home on June 1, 2006. June 1 will be considered the anniversary date of your loan. On June 1, 2007, your loan will be written down to $2,000 assuming that you fulfill all of the conditions of the EAH program. On June 1, 2008, the loan will be written down to $1,500 and so on until June 1, 2011 when the loan is extinguished.
What must I do to have the loan forgiven?
Your requirements are relatively few. You must remain as a full time employee of the college for the five years. You must continue to own the house and live in it as your primary residence. You must sign an annual certification that you are in compliance with the requirements of the program.
Do I have any other obligations?
At the time you receive the benefit, you will sign a promissory note in which you agree to repay the benefit if certain events happen within five years. That note will be secured by a second mortgage on the home that will be signed and recorded at the time you close on the house. You will need to provide the college with a report on the title to the property, a survey of the property and evidence of insurance on the property, all things that your primary mortgage lender will also require.
When do I receive the EAH benefit?
Your check, less the costs of preparing and recording the mortgage on the house, will be available to you at the time you close on your purchase.
What happens if I decide to sell the house within five years?
The amount of the loan that has not been forgiven will be due and payable upon the sale of the house. The college will not discharge its mortgage on the property until it is paid this amount.
What happens if I no longer work for the college?
The amount of the loan that has not been forgiven will be due and payable, although you will be able to make monthly payments over the remaining term of the note with interest at M&T Bank's prime rate. Thus, if you leave the college after three years (after 60 percent of the loan has been forgiven), the remaining 40 percent of the loan will be payable with interest over two years.
If I leave the college in the middle of the year, is loan forgiveness pro rated?
No. Loan forgiveness will occur only on the anniversary date of your loan and only if you are still employed by the college. Loan forgiveness is not pro rated for partial years worked.
I currently own a house within the Eligible Area but want to move to another house within the Eligible Area. Do I qualify for the program?
How many times may I receive the benefit under the EAH?
The EAH benefit is available once to an employee during employment at Canisius. If the employee leaves Canisius and returns to the college, the EAH benefit is still available only once to that employee.
How do I obtain the EAH benefit?
The Personnel Office can tell you if you are eligible to apply. If you are a first time homebuyer, you will need to attend a free home buying seminar offered by Hunt Real estate or M&T Mortgage Corporation. You then need to purchase a house within the Eligible Area, submit an application with a copy of the Contract of Sale and wait for formal notification from the Personnel Office that you have qualified.
How do I apply?
Application forms are available from the Personnel Office. A completed application also requires a copy of the Contract of Sale, your application for your mortgage and the commitment letter from your primary mortgage lender. The completed application must be delivered to the Personnel Office, which will confirm your eligibility for the EAH program.
How do I find a home within the Eligible Area?
The college has established a partnership with Hunt Real Estate, one of Western New York's leading real estate firms. Brokers from Hunt are available to work with you to find the right house within the Eligible Area. Contact Mary Croglio at Hunt at 633-9400 or by fax at email@example.com.
Am I required to work with a Hunt broker?
No, but you should examine the benefits being offered by Hunt to Canisius employees under the EAH before you decide. But you are free to use the broker of your choice.
How can I get a mortgage loan for my new home?
The college has entered into a partnership with M&T Mortgage Corporation and Hunt Mortgage to provide mortgages on very attractive terms to Canisius employees. M&T is offering a dedicated mortgage consultant for the Canisius EAH. You can contact Molly Scott at 743-3319 or at firstname.lastname@example.org. Hunt Mortgage is a Hunt company and you can contact Mary Croglio for information on a Hunt Mortgage mortgage. The college may add additional mortgage partners from time to time.
Am I required to work through M&T or Hunt Mortgage?
For the time being, yes. In order for the college to obtain its second mortgage lien on the property, we have pre-approved documents with M&T and Hunt Mortgage. These leaders have also agreed to have their attorneys handle the closing for the college, resulting in a savings to the employees. Other lenders have not approved the Canisius documents and would likely not consent to the college's second lien so, for the time being, we must require that employees work through M&T and Hunt Mortgage. Exceptions to this rule may be made through the Personnel Office, but if your mortgage lender will not accept the Canisius documents without change or will not make appropriate arrangements for closing, you will not be eligible for the EAH benefit.
Is the EAH benefit taxable to me?
Yes, but not until the loan is actually forgiven. In our example above, assuming an EAH benefit of $2,500 received on June 1, 2006, there would be no taxable income to you in 2006. On June 1, 2007, $500 of the loan is forgiven. That $500 will appear as income to you on the W-2 you receive from the college for 2007. It is subject to FICA and all other withholding taxes.
Is there a limit to the number or amount of EAH loans to be made by the college?
We will try and accommodate all employees but it may be necessary to place a limit on the loans. If a limit is established, we will let employees know. For the time being, the benefit is available on a first come, first approved basis.
Does service in the Faculty Resources Program (FRP) count as full-time employment for the EAH purposes?
Yes, each year of service in the FRP is considered a full year of service for loan forgiveness.
Before the EAH Program began, I bought a home within its targeted boundaries. I am refinancing my mortgage. Will I now qualify for the EAH Program?
No, refinancing your home does not make you eligible for the EAH Program.