Amazon is letting employees use their stock to finance home purchases and even second homes

Better.com is launching Equity Unlocker, a program that allows employees to use their vested equity as collateral for a down payment when trying to buy homes. Amazon employees in Florida, New York and Washington State will be the first to try the tool. Unique about the program, according to Better.com, is that employees will have the ability to finance their homes without actually selling their shares, only needing to pledge vested equity.

Even former Amazon employees with vested equity can use the service, according to Better.com, and there are many, following Amazon’s companywide layoffs. Current and ex-workers can also use the mortgage tool for secondary vacation homes or investment properties. The closing cost, when the loan is secured, ranges between 2% and 5% of the loan, Better said on its website. There is a catch, however.  As reported earlier today by the WSJ: “To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock — between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured.”

Brad Glasser, an Amazon spokesperson, told TechCrunch via email that the company is “always looking for opportunities” to enhance its benefit offerings “and better support employees’ mental, physical, and financial wellness.”

He added: “As part of that, we offer a wide-ranging slate of financial benefits, including saving resources, tools to grow financial knowledge, and programs that help employees feel financially sound. Eligible employees can access these benefits starting on the first day of their employment with us, regardless of role or location.”

While this new service from Better is focused specifically on the homebuying process, the philosophy behind the program, the company says, is to provide support for the “whole employee.”

“Financial wellness, mental wellness, and physical wellness are all essential facets of employee health, and they all affect each other,” Glasser said. “For financial wellness, that means providing benefits that aid with both short- and long-term financial success, for employees’ time at Amazon and beyond.”

It’s a creative, but also surprising, partnership. Better has been an Amazon Web Services customer since 2015 and its loan origination system is powered entirely by the software, according to a statement. Still, Better has been through its fair share of struggles that have cast doubt on its future. Last May, TechCrunch reported on a filing that revealed that Better.com had swung to a loss of more than $300 million in 2021 after a rapid-fire decline in business brought on largely by a slowdown in the housing market and a surge in mortgage interest rates.

The company’s reputation also took a huge hit over the manner in which it conducted numerous rounds of mass layoffs, which also resulted in an executive exodus. Better.com also made headlines last July, when it appeared to still be moving forward with its SPAC filing despite lackluster performance of blank-check combination debuts. (On the same day of the updated SPAC filing, the WSJ reported that the SEC is examining whether Better.com violated federal securities laws, per a disclosure from the company.)

While Amazon may be its test guinea pig, Better is aiming to make Equity Unlocker available nationwide for employees of public and private companies.