Friday, July 15, 2005
REACH Illinois
REACH Illinois is a State supported employer-assisted housing program. In the Chicago area the effort is being led by the Metropolitan Planning Council. Housing Action Illinois is spearheading the efforts throughout the rest of the state. If you are an employer, here's the scoop:
Say you want to help 20 of your employees with down payment assistance of $3,000.
Down Payment Assistance: $60,000
Program Administration: $40,000 (includes homebuyer counseling and education, evaluation, etc.)
Gross employer investment: $100,000
Tax Benefits (for the company with employees' household income up to 120% of area median income ($72,600 for a family of four in 2005):
State of Illinois Tax Credit: $50,000
Federal Tax Deduction: $19,000
Total Tax Benefits: $69,000
Employer Net Cost: $31,000
(Source: REACH Illinois brochure published by Metropolitan Planning Council, Housing Action Illinois, and IHDA)
Now, add in the State's willingness to assist families at 80% or lower of the area median income (in Rockford, that figure is $48,400 for a family of four in 2005), and your employees who meet that criterion may end up with $6,000 in benefit. That comes to $120,000 in benefits for the price of $31,000!! Not only that, but you can build in a recapture agreement that encourages your employees to stay with your business. If they leave your company within that recapture period, they must repay your investment. This will encourage employees to stay with your company, saving you money in recruitment and training costs.
So, what's the downside?!? For an employer it is the upfront investment. If an employer does not pay state taxes, they can sell their tax credits to a company that does have such a burden. The value of the tax credits will vary with the market, right now they are about $.80/dollar of value.
Is anyone doing this? Absolutely. Visit the Metropolitan Planning Council or Housing Action Illinois for more information on companies who are taking part in this initiative. If you would like more information, call the Rockford Area Affordable Housing Coalition and ask for Bob. We'd be more than willing to set up an appointment to discuss this awesome opportunity with you!
Say you want to help 20 of your employees with down payment assistance of $3,000.
Down Payment Assistance: $60,000
Program Administration: $40,000 (includes homebuyer counseling and education, evaluation, etc.)
Gross employer investment: $100,000
Tax Benefits (for the company with employees' household income up to 120% of area median income ($72,600 for a family of four in 2005):
State of Illinois Tax Credit: $50,000
Federal Tax Deduction: $19,000
Total Tax Benefits: $69,000
Employer Net Cost: $31,000
(Source: REACH Illinois brochure published by Metropolitan Planning Council, Housing Action Illinois, and IHDA)
Now, add in the State's willingness to assist families at 80% or lower of the area median income (in Rockford, that figure is $48,400 for a family of four in 2005), and your employees who meet that criterion may end up with $6,000 in benefit. That comes to $120,000 in benefits for the price of $31,000!! Not only that, but you can build in a recapture agreement that encourages your employees to stay with your business. If they leave your company within that recapture period, they must repay your investment. This will encourage employees to stay with your company, saving you money in recruitment and training costs.
So, what's the downside?!? For an employer it is the upfront investment. If an employer does not pay state taxes, they can sell their tax credits to a company that does have such a burden. The value of the tax credits will vary with the market, right now they are about $.80/dollar of value.
Is anyone doing this? Absolutely. Visit the Metropolitan Planning Council or Housing Action Illinois for more information on companies who are taking part in this initiative. If you would like more information, call the Rockford Area Affordable Housing Coalition and ask for Bob. We'd be more than willing to set up an appointment to discuss this awesome opportunity with you!
