Housing Assistance Loans: New Scientists
As part of the recruitment package, the Woods Hole Oceanographic Institution may provide a no-interest housing assistance loan for new members of the Scientific Staff who are purchasing a home within a 50-mile circle of Woods Hole. The total amount available for an individual loan will be determined annually based on internal access to funds and external market forces. The loan will be repaid through payroll deductions.
The housing market on Cape Cod has seen a steady increase in prices that far exceeds the increases that WHOI can provide in salary and recruitment incentives. In order to remain competitive and attract the best possible candidates, the Institution will provide additional assistance for the purchase of a home to new Scientific Staff members.
Who is eligible for a no-interest housing assistance loan?
WHOI retains the right to determine, in its sole discretion, who is eligible to receive a no-interest housing assistance loan under this policy. Generally, those eligible to receive a no-interest housing assistance loan are members of the Scientific Staff who meet all the following criteria:
- Hold a full-time, regular appointment
- Are making a new home purchase within 36 months after the date of appointment to the Scientific Staff.
- Do not own any residential property or investment property at any location at the time the loan is requested. (Not including temporary ownership due to inability to sell a previous property prior to purchase of the new residence or short-term ownership of a prior residence pending its sale.)
- Are not a rehire.
- Do not currently own a residential property within a 50-mile circle of Woods Hole.
- The new home to be purchased is within a 50-mile circle of Woods Hole and it will be the primary residence of the employee.
In the event that two eligible persons share ownership of one residence, only one housing assistance loan is available.
What is the maximum amount of the loan?
The maximum amount available for an individual housing assistance loan will be determined annually based on internal access to funds and external market forces. The current maximum amount is $15,000.
What is the repayment period?
All no-interest housing assistance loans must be repaid within 3 years (78 pay periods) of the receipt of the loan.
What are the tax implications of this loan?
If the amount of this no-interest housing assistance loan, in combination with any other below-market interest rate Institution loans, exceeds $10,000, the IRS requires that the imputed interest be reported by the employee as unearned income.
What happens if the employee leaves the Institution before the loan is fully repaid?
In the event that termination of employment, for any reason (other than the employee’s death), occurs before full repayment is made, the loan becomes due and payable immediately. The Institution is authorized to deduct the unpaid balance due from any compensation otherwise payable, including any amounts payable to the employee for accrued but unused vacation time, in the employee’s final paycheck, up to the maximum amount deductible by law.
An extension after termination of employment, if approved by the Vice President for Finance & Administration, will bear interest at a rate commensurate with that used by commercial banks for similar loans at that time.
If any loan has not been fully repaid within 60 days after the due date, the unpaid amount shall bear interest, payable monthly, at a rate of 10% per year from the due date.
Should any unpaid balance be more than 60 days past due, it may be submitted to a collection agency.
What happens if the employee is permanently disabled?
Should an employee become permanently disabled, as determined by the Institution, before the loan is fully repaid, the monthly payments due will be reduced to ½ of the established monthly payroll deductions and the length of time for repayment will be extended accordingly. The Institution will provide a new promissory note to the borrower to reflect such changes.
What happens if the employee dies prior to fully repaying the loan?
Any of these loans outstanding to the employee at the time of his or her death will be forgiven by the Institution. Based on tax rules issued by the IRS, if the employer forgives a loan, the remaining loan balance becomes wages, subject to employment taxes and wage reporting.