Why We Developed JWB’s Homestep Home Buying Program

Homebuying assistance programs are starting to gain traction among property management companies, and for good reason. They’re a great way to give something back to your residents while also differentiating yourself from the competition.

In this article, I’m going to walk through Homestep, JWB’s homebuyer assistance program, including how it works, how we implemented it, and how it’s helped our business so far.

Asking, “what’s the most we can do?”

At JWB, instead of asking ourselves “What’s the least we can do to solve this problem?” we ask ourselves, “What’s the most we can do?” We’re always looking for ways to go above and beyond to delight our clients and our residents. With our Homestep program, we wanted to take that approach even further.

We knew that housing affordability is a challenge, both in our city of Jacksonville and across the nation. High interest rates make affordability even more difficult, and many residents didn’t feel prepared, equipped, or educated enough on the topic to build up a downpayment. With that in mind, we wanted to try to take a small bite out of that elephant and make an impact for the residents that we serve.

We recognize as a team that home ownership and equity can not only change a person’s immediate situation, but start to create generational wealth and put more power in the hands of the everyday people that we’re working with. We have real estate expertise in house, and we wanted to pass that on to our residents.

Plus, from a pure business standpoint, we were confident that a robust homebuying program could be a differentiator from leasing, all the way through the full resident experience and lifecycle.

How the program works

When we designed the Homestep program, we wanted something that would give true value to our residents without overloading our team or overcomplicating our existing processes. We were deliberate about who we allowed to participate and what kind of home purchases qualified.

Who’s eligible to participate?

To start, we didn’t want this to be an opt-in or closed program. That’s why every resident that rents from us is automatically enrolled from day one. At least signing or renewal, residents are automatically enrolled, and stay enrolled provided that they remain in good standing.

Each month that they rent one of our properties, they earn $100 per month toward a future housing purchase, with benefits maxing out at $3600. We offer a lot of long-term leases, which also max out at three years, so it was a logical way to align the program.

Of course, residents don’t have to wait the full three years to leverage their Homestep funds. They’re eligible to redeem their funds for a home purchase any time after twelve months of residency with us. We also allow Homestep users out of their lease early with no penalty, as long as they’re in good standing; rent is paid, no physical damage to the property. We ask that residents provide a 60 day notice once they’re under contract for their home, and we don’t charge any fees for terminating the lease early. That added flexibility means that more residents can take advantage of the benefits they’ve earned, while we still have ample time to prepare for a turnover.

Redeeming your Homestep benefit

When a resident in the Homestep program finds their dream home, the process is pretty simple. As long as they don’t have an open balance on their lease ledger, there’s no major damage to the property, and they’ve rented with us for at least a year, they’re eligible to use the funds they’ve accrued.

This isn’t just a simple transfer of dollars—we don’t hand them a check and say, “go buy a house.” Instead, we work with them via our Realtors. Residents have the option to purchase one of our new construction properties that are for sale. If they aren’t interested in purchasing one of our homes, that’s also completely fine; they can work with a JWB real estate agent to buy whatever home they’d like. In fact, we hired a dedicated Homestep buyer’s agent who’s a true specialist in first-time homebuying, so residents know exactly who they’ll be working with.

We designed the program this way because we wanted everything to be as flexible as possible. Our homes are affordable compared to the average sales prices in Jacksonville, but we didn’t want to lock our residents into that. We wanted to give them options by opening the program up to any home in the area, provided they work with one of our agents.

Going beyond finances

We also knew that homebuying challenges extend far beyond just affordability. That’s why our program starts with education. We pair the financial side of the program with education, support, and resources to drive value. We want our residents to understand topics like escrow accounts, property taxes, homeowners insurance, PMI, and HOA fees before they make one of the biggest financial decisions of their lives. These are things that first-time homebuyers might not understand, and we want to be there to truly support them.

We had already started hosting free homebuying education classes years before we introduced the Homestep program. We had worked to support residents who were looking to buy homes, matching them with our lending partners and insurance partners. We were already offering our realty services to residents who wanted to purchase homes. The Homestep program just reemphasized the importance of our education efforts.

Every quarter we market our homebuying class to all of our residents. We host them at our office in the evenings, and we provide pizza and soda so that people can bring their kids and families if they need to. Sessions are about an hour long and open to the first 100 registrants, which is the max capacity for our office space.

One particular member of our team is extremely well versed in real estate, and has actually done all of JWB’s property acquisitions, so she was a natural fit for this role. She teaches our homebuying class and leverages all of that expertise to help our residents better understand what the process is like. We invite a preferred lender to co-teach the class and cover the underwriting process and financial side of homebuying.

It’s an opportunity for our property managers to get facetime with residents, and our realty team is there to answer any questions anyone has. Afterward, we send attendees follow-up information on the Homestep program so that people are fully informed and know what their options are.

Seeing real results

We only introduced the Homestep program a little bit under a year ago, but already we’re seeing a real impact on the lives of our residents. We already have over 3,200 residents officially enrolled, which is a big chunk of our 5,600 homes under management.

We have about 30 residents currently actively looking to find a home through the program, most of them working with our Homestep buyers agent, and four under contract. Year to date, we’ve closed 11 deals with our residents. As a side benefit, it’s also helping us build up our realty business’s brand, which has been great to see.

The long-term goal for the program  is to hit five Homestep closings per month. We’re really excited about the growth of the program and our ability to have such a huge impact on our residents’ lives.

Honoring our commitment to our clients

As we were putting together the Homestep program, we wanted to make sure that we were also honoring our commitment and our fiduciary duty to our clients. There was a lingering question of whether encouraging residents to purchase homes—and vacate our rental properties—was counter to our mission.

The reality is, residents who are interested in the Homestep program are likely to be high quality, dependable residents. They’re more likely to pay on time and take better care of the property because they want to be eligible to use those funds when the time comes. There’s an inherent benefit in having financially-savvy residents in your properties.

Plus, we made sure that residents have to stay for at least twelve months in order to use their funds, so we’re already encouraging them to stay at least a year. Plus, they start to develop a more personal connection to their home, their management company, and the property owner, because we’re giving them real, life-changing value.

Aligning our focus as a company

We didn’t get a lot of pushback from clients, who saw the benefit of the program. We did have some conversations about it internally, because we wanted to make sure that this investment was aligned with our mission. We even looked at our internal KPIs, like renewal rates, and reevaluated how we were measuring performance. Now, in addition to their goals around renewing a certain number of leases, property managers are also measured on how many Homestep leads they generate.

We wanted to shift our view to look at the bigger picture. What is it that we’re trying to accomplish? By reevaluating our team’s goals and realigning them with this new initiative, we stayed true to our mission as a business. We didn’t want to be so focused on just one metric—in this case, renewal rate—that we missed the larger point.

Do what makes sense for your company

Introducing a comprehensive homebuyer assistance program has been great for JWB. If you have the financial means and infrastructure to develop a homebuying program of your own, I’d definitely recommend it. But the good news is that you don’t have to shell out a ton of money to empower your residents. We chose to offer the $100 per month, but there are other ways to do this that cost a lot less.

Homebuyer education classes can be done cheaply or even for free if you have someone qualified on staff. Offering credit building services is a great way to help residents prepare for homebuying. There are plenty of ways to get creative.

Remember, small steps can still make a big impact.

Looking for more ways to delight your residents? Join our next RBP workshop to hear from real property managers who have implemented a Resident Benefits Package and improved the resident experience.