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Fox – 2 Detroit
Brian Morales and his partner always knew they would become homeowners one day. But that seemed a long way off, until unexpected help arrived.
The company where Morales works as an engineer has announced a new employee benefit that will help with both financing and planning for a home purchase. Morales jumped at the chance, and now he and his family are the proud owners of a triplex, living in one unit and renting out the other two to earn income to offset the mortgage costs.
“It’s kind of hard to turn down benefits like this,” Morales told USA TODAY. “I don’t think I could have made it this far on my own. I wanted my family to have a safe home and a better financial future.”
The benefits Morales used came from a company called Oro, founded by George Fatherly and partner Keisha Mays. Mr. Fatherly worked as a real estate attorney in Big Law for many years, but his epiphany came when he took on a project he called a “passion” to help a black family whose waterfront land was taken over by the city more than 100 years ago.
Thanks to Fatherly’s legal work, the land was returned to the family, marking the first time in U.S. history that the government returned property to a black family.
Fatherly described the experience as “a front row seat to what happens when people, families and communities are denied the opportunity to own a home, own property, own land and create generational wealth.” This insight led him to co-found Oro in an effort to close the gap between rich and poor by enabling access to homeownership through workplace benefits.
Housing can be a headache for both employers and employees
High costs and barriers to entry in the housing market are a headache for workers as well as employers. The daunting cost of living can make it difficult to attract and retain staff. It may also mean that some workers are less productive at work because they are commuting very long distances or spending a lot of time trying to become homeowners on their own.
“Employers are complaining,” said Julie Dolan Stewart, who manages fiduciary advisory services at Sentinel Group, a national benefits consultancy. “This is really what everyone is working on, and it ultimately impacts the business side as well.”
Oro allows employers to offer everything from financial assistance, such as down payment funding, private mortgage insurance coverage, and lower interest rates, to counseling and preparation for the process of becoming a homeowner. This benefit can be tailored to a specific company, and any terms and conditions an employer desires to ensure that an employee remains with the company after taking advantage of the Oro benefit can be set.
One way to help democratize homeownership is to offer benefits only to first-time buyers, who are likely to be younger and less wealthy, Fatherly said.
He and industry experts who spoke to USA TODAY acknowledged that this type of service is not new. Employers have long provided housing subsidies, especially to high-status workers or those encouraged to move to more expensive areas.
What sets Oro apart is that he makes homeownership a standard part of the economic package, including retirement plans, medical and transportation savings, and insurance that workers are now accustomed to receiving from their employers.
“I’m a big fan of all kinds of nudges that encourage people to understand more about their goals and what they’re saving for, whether it’s through a wellness platform, working with an advisor, or doing it on their own,” said AJ Ayers, equity compensation specialist and co-founder of financial planning firm Brooklyn Phi.
“The idea of an employer-provided platform that helps you save money (and) build credit, I think is a win,” Ayers said.
Home ownership as an employee benefit
Mr Stewart said there were good reasons for third parties like Oro to provide housing benefits. “The plumbing is a little bit more complex, and from a privacy perspective, you’re going into people’s debts and other things that maybe the HR team doesn’t think should be within the scope of the organization they’re responsible for.”
Kelly Send, senior vice president of financial wellness services at consulting firm Francis LLC, also praised Oro’s approach.
“They capture one of the great frustrations for young people today,” Send said. “They’re trying to pay off student loans, trying to get by, and they don’t have enough money to do that and save up to buy a house.”
But Send also noted that some employers are choosing to offer similar assistance through financial planner benefits, which can provide a more holistic view of an employee’s entire financial life. She also wonders if there is enough support for employees who see the benefits of Oro’s offerings but are nervous about getting started.
The company is still young, Fatherly told USA TODAY, and is learning as it goes. For example, the decision to offer homeownership counseling services was prompted by the lack of participants in programs offering down payment assistance.
Fatherly was perplexed until a discussion with the company’s employees revealed that most people didn’t even know how to start buying a home. They were the first in their family to try something like this and didn’t understand credit, down payments, or other processes.
“For me, employer-provided housing assistance is an equalizer and helps level the playing field,” Fatherly said. “But it also makes sense in terms of aligning the interests of employees and employers.”
