Buying a Home Assistance

Program provides help for home buyers

MARY STEGMEIER
For the Argus Leader

Published: 06/3/05

When Don Krell says "June 15," a proud smile spreads across his face.

That's the day the First Premier Bank employee and his girlfriend will complete the largest purchase of their lives - a three-bedroom ranch-style house in Baltic.

The excited couple agreed that navigating the home-buying process was made easier with the help of Krell's employer.

First Premier Bank is one of several Sioux Falls companies that offers its workers home-buyer counseling and a low-cost way to finance some initial costs of buying a home through the Employer Mortgage Assistance Program. EMAP, launched in 1999, offers buyers low interest loans that cover down payments and closing costs.

Twenty companies in South Dakota, including 12 from the Sioux Falls area, take part in the program, which is coordinated by the South Dakota Housing Development Authority.

The program allows the employer to vouch for their workers, making it possible for the employees to secure a loan at a 2 percent interest rate. The loan, essentially a second mortgage, finances the initial cost of buying a home and must be repaid within five years.

Each employer determines the highest limit for the mortgage loan - typically between $2,500 and $3,500. The payment is bundled into the employee's monthly mortgage payment.

Though Krell chose not to take out an EMAP loan, he said the program is a good way for new home owners to finalize the deal without dipping into their savings. Krell also said the classes and counseling sessions offered by his employer allow future home owners such as himself to plot a purchasing plan that is right for them.

"I didn't even know there were different types of mortgages," he said. "It really helped us know what we were getting into."

Julie Clark, education director of the Sioux Empire Housing Partnership, helps employers in the Sioux Falls area implement the mortgage assistance program.

Any area employee who participates in the EMAP program is required to take part in a home-buyer education session conducted by the nonprofit.

The meetings are designed to ensure that future homeowners understand the financial responsibilities of homeownership. The average cost of a home in the Sioux Falls region is $146,643.

As more and more residents find themselves saddled with debt and without substantial savings, home ownership can seem impossible, Clark said.

"We are not a society of savers," she said. "There is a need for down payment assistance, and there is a need for education ... you can't go into home ownership blindly."

Clark said the EMAP program helps keep the area work force stable. When workers buy a home, they are less likely to leave the region for another job, she said.

That assumption has proven true at John Morrell & Co., said human resources director Butch Anderson. The meat-packing plant is one of EMAP's most active participants, and employees who take out the low-interest mortgage tend to stay at the company, Anderson said.

"When they feel like they are part of the community, they are less likely to leave the company," he said. "Buying a home means they will stay here."

An added bonus is the pride that owning a home instills in the company's workers.

"Everyone dreams of having a home, whether you were born abroad or in the United States," Anderson said.
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