Award recognizes innovative uses of the ACH Network to improve delivery of financial services
BOSTON -- April 19, 2016 -- Neighborhood Pay Services (NPS), the leader in payment assurance for the Rental Housing industry, today announced that its proprietary Rent From Payroll® direct deposit platform, NPS Rent Assurance®, has been recognized by NACHA - The Electronic Payments Association® with the 2016 Kevin O’Brien ACH Network Award. The award recognizes NPS for innovation in leveraging the ACH Network with a simple solution that reduces credit and payment risk, resulting in a more financially inclusive option for improved access to quality rental housing for credit challenged consumers, and improved performance in key operating metrics for single-and multifamily property owners.
“By building a SaaS platform that capitalizes on the ACH Network to establish timely rent delivery matched with forward-looking data on payment performance, we’re changing the dynamics between property companies and renters around credit assessment and payment predictability, with better outcomes for all parties,” says Ellen S. Calmas, Co-Founder and Executive Vice President of Neighborhood Pay Services. “We’re honored to be recognized by NACHA for our success in proving out a direct deposit solution through payroll that redefines credit and payment risk based on a consumer’s willingness to better manage their payment obligations.”
Named in honor of the late Kevin O’Brien, NACHA’s 1999-2000 Chair, the award is part of NACHA’s Payments System Awards, which recognize the highest degree of achievement in the development, implementation and advancement of electronic payments. These prestigious awards celebrate excellence, outstanding accomplishments and superior leadership in innovation to further the ACH Network and were presented at the PAYMENTS 2016 Conference in Phoenix, Arizona, the premier educational event for the payments industry.
“NACHA is proud to recognize NPS Rent Assurance as the recipient of the Kevin O’Brien ACH Network Award,” said Janet O. Estep, president and CEO of NACHA. “NPS Rent Assurance has found innovative ways to meet the needs of a changing payments industry while demonstrating just how important and integral electronic payments are to everyday life.”
About NPS Rent Assurance (http://www.npsrentassurance.com/)
NPS Rent Assurance provides a significantly lower cost option for millions of credit challenged consumers to gain access to professionally managed rental housing without draining already fragile personal savings, while also ensuring on-time lease payments after move-in. The NPS platform works exclusively through the NACHA ACH Network with direct deposit form employers and special income sources. Enrollment in the NPS program is offered by leasing professionals to consumers whose credit is below qualifying standards in lieu of additional security deposits that average $500 - $1500 and/or the need to secure guarantors. The automated NPS payment assurance platform creates stability for both the NPS customer and their landlord, resulting in retention that is twice the industry average with a >75 percent decrease in early lease terminations. NPS reporting to a national credit bureau helps consumers build or improve credit scores as another means to better function in the financial mainstream.
About NACHA — The Electronic Payments Association (nacha.org)
Since 1974, NACHA – The Electronic Payments Association has served as trustee of the ACH Network, managing the development, administration and rules for the payment network that universally connects all 12,000 financial institutions in the U.S. The Network moves money and information directly from one bank account to another. Through its collaborative, self-governing model, education, and inclusive engagement of ACH Network participants, NACHA facilitates the expansion and diversification of electronic payments, supporting Direct Deposit and Direct Payment via ACH transactions, including ACH credit and debit payments, recurring and one-time payments; government, consumer and business transactions; international payments, and payments plus payment-related information. Through NACHA’s expertise and leadership, the ACH Network is now one of the largest, safest, and most reliable systems in the world, creating value and enabling innovation for all participants.
Analysis of Nearly 250,000 Conditionally Approved Renters Finds More than 75% Are Required to Pay One to One-and-a-half Month’s Rent for a Security Deposit
BOSTON - November ¬¬¬18, 2015 - Affordability for the 65 million Americans seeking rental housing has become a greater financial burden, and not just from increasing rents. In today’s rental environment, more apartment communities are requiring individuals and families to pay increased security deposits to offset future payment risk associated with lower credit scores.
According to “False Sense of Security,” a new analysis of 247,305 conditionally approved rental applicants, nearly 66 percent are required to pay a full month of rent as a security deposit, another 12.5 percent are required to pay one-and-a-half times the monthly rent, and another 2.8 percent pay a security deposit equivalent to two months rent at lease signing. Security deposits have evolved from an effective means to reduce financial risk posed by residents damaging a unit to an increased move-in fee related to credit-worthiness and a presumed ability to pay.
“When you consider 30-40 percent of our applicants are approved with conditions, it’s apparent the demographic of renters who are living paycheck to paycheck is steadily increasing,” says Jason Whittington, vice president of business solutions for Indianapolis-based Gene B. Glick Co., a developer and property manager of more than 20,000 units in 10 states. “By reducing move-in costs for our residents and offering various lease terms and payment options we’ve been successful moving in more applicants who can fulfill the financial obligations of the lease. In our experience, requiring one to two months of additional rent as a security deposit puts the resident on poor financial footing at the start of the lease, resulting in an even higher likelihood to pay late or skip payments altogether.”
The U.S. Department of Housing and Urban Development recommends renters allocate no more than 30 percent of monthly income to housing. But for many, this rent-to-income ratio is increasing to as much as 50 percent, as rents have increased significantly faster than salaries, exponentially growing the pool of rent burdened consumers.
“The increasing cost for renters to qualify for a lease has emerged as a national issue. As more consumers face higher move-in costs and budgeting becomes even more critical given the percent of their income required to satisfy their monthly rent obligation, offering new solutions like Rent from Payroll, which provide renters with more options and assured timely rent payments is becoming more important,” says Rich Levitan, president of Neighborhood Pay Services, the company that analyzed the current status and impact of increased security deposits. “Additionally, the consistent financial performance of residents who enroll in rent from payroll programs translates into more stable resident populations, reductions in skips, evictions, lost and late rent, and positive impact to a community’s operations and profitability.”
Average Security Deposit Requirements Across the U.S.
Significant state-by-state disparities exist surrounding the average increased security deposit requirements of conditionally approved residents. Nationally, residents in the study who were screened and approved with conditions were required to pay $785 in additional deposits to qualify for an apartment lease averaging $981 in monthly rent. Not surprisingly, states with higher rents, and higher frequencies of additional security deposits for conditional applicants, present the greatest financial impediment for renters seeking quality housing.
As a result, historically high rent states including California ($1,891), Massachusetts ($1,719), New York ($1,645), Connecticut ($1,364) and New Jersey ($1,280), led rankings of the top five “worst” states for conditionally approved apartment residents, requiring the highest average amounts of additional security deposits.
At the opposite range of the spectrum, the five states with the lowest security deposit requirements are Arkansas ($341), Iowa ($386), New Mexico ($391), Oklahoma and Mississippi (both $411). These states are considered “the best” places for residents who are more likely to be approved with conditions.
While state-by-state average wages may seem to provide some mitigation to the average “best” and “worst” states when it comes to the cost for conditionally approved residents to move in, data from the National Low Income Housing Coalition shows that the average American household must earn at least $19.35 per hour in order to afford a modest two-bedroom apartment without spending more than 30 percent of income to rent. As a result, one in four renter households (10.3 million renter households) can no longer afford rent based on the area median income.
Click the link to download a complimentary copy of “False Sense of Security: The Failure of Increased Security Deposits in Converting and Assuring Payment Performance from Conditionally Approved Apartment Renters.”
“Beyond the financial benefits to our communities, in our experience offering innovative solutions to help conditionally approved applicants qualify for the apartment they want to live in reaffirms Camden’s commitment to provide an unmatched living experience,” said Kip Zacharias, vice president of business services for Camden Property Trust “And a satisfied resident is more likely to renew, extend their length of stay beyond the industry average, and serve as a referral source for the community.”
About the Analysis
Neighborhood Pay Services analyzed 247,305 conditionally approved leases initiated between August 2014 and August 2015, as identified by its strategic resident screening partner First Advantage, a Symphony Technology Group Company. The leases included in the analysis represent a cross section of apartment applicants nationwide.
About NPS Rent Assurance
NPS Rent Assurance® is the originator of Rent From Payroll® and the only rent from payroll direct deposit platform providing the rental housing industry with a proven solution for building incremental occupancy with improved payment performance from conditionally approved and credit denied residents. NPS Rent Assurance is offered exclusively through rental leasing offices as a key component of conditional lease offers and a mechanism to automate rent recovery plans for existing residents who fall behind in their lease obligations.
Cloud-based rent from payroll innovator launches Green initiative to deliver content to renters in on-demand, electronic format to assist consumers in making better informed leasing decisions.
(BOSTON,MA - July 24, 2015) NPS Rent Assurance®, the leader in Rent From Payroll® for the rental housing industry, announced today a major Green Initiative to eliminate the use of printed marketing and sales materials previously provided to leasing offices for prospective renters. The company, which does business with rental housing operators of nearly one million apartments across the U.S., is adapting to changing consumer patterns for gathering information in an attempt to be both more environmentally conscious and add greater value in the lease-up process.
Following similar paperless initiatives from major multifamily operators that offer NPS Rent Assurance to help lower credit renters better afford a rental lease, NPS projects that other service providers will see the time for change and follow suit.
“Today’s renters don’t just go online, they live there,” notes Ellen Calmas, co-founder and executive vice president at NPS. “The days of handing someone a brochure because they might want to enroll in your program no longer make sense for generations of consumers who are accustomed to searching for information and making decisions in on-demand, mobile environments. We can save a lot of trees by providing program content in e-readable forms to individuals offered a rent from payroll lease option versus anyone and everyone who walks into a leasing office.”
NPS, First Advantage to share exclusive survey results at NAA Conference on the integration of screening and rent from payroll to help property clients increase leasing velocity, cash flow, and economic occupancy.
(Las Vegas - June 22, 2015) - Adopters of Rent From Payroll® from Boston, Mass.-based NPS Rent Assurance® are boosting cash-flow and net operating income for enhanced property values by offering conditionally approved apartment residents a lower cost option for moving in while practically guaranteeing on-time rent delivery.
Recent Rent from Payroll success stories from firms including Gene B. Glick Company, The Lynd Co., Northland Investment Corp. and others were highlighted in Rent From Payroll: The Ultimate Value Booster, a position paper released at the 2015 National Apartment Association (NAA) Education Conference in Las Vegas, Nevada.
Specifically, rent from payroll results in 66 percent longer resident lengths of stay when compared to conditionally approved renters who were required to provide an extra security deposit, additional months’ rent or a guarantor/co-signer to qualify for a lease. Presenting an offer that conditionally approved residents can accept right away rather than requiring them to secure additional move-in deposits and/or a guarantor/co-signer also increases leasing velocity and turn times.
“The simple but revolutionary application of funds for rent coming directly from payroll has seen great adoption across the multifamily apartment industry,” said Richard A. Levitan, president of NPS. “As an alternative to guarantors and increased security deposits, rent from payroll is offering property owners and managers with different portfolios and different sub-markets a superior means to move-in more conditionally approved residents while improving net operating income, decreasing bad debt, and increasing resident length of stay.”
NPS will join First Advantage, the leading provider of background screening analytics and identity solutions for housing providers and employers, to unveil details of the firms’ strategic integration partnership during the NAA Conference at Booth #531.
NPS and First Advantage will also share exclusive NAA Conference results from a survey on security deposit, screening, conversion and rent payment trends among conditionally approved apartment residents.
Among the findings from the survey of 254 First Advantage users:
"By adding rent from payroll to the suite of services we offer our property clients, we are now able to combine the quality applicant screening we're known for with predictive payment insights on conditionally approved residents before rent payment issues arise. These data points are new to the rental housing industry and very exciting," says David Carner, First Advantage senior vice president and general manager, resident solutions.
Conditionally approved residents opt in to the NPS Rent Assurance rent from payroll program prior to lease signing in lieu of paying higher security deposits. Once enrolled, prorated payroll deposits are sent to NPS directly from the resident’s employer every pay period. The funds are aggregated by NPS over the course of each month and forwarded electronically for easy A/R match up to participating communities.
Click the link to download a complimentary copy of Rent From Payroll: The Ultimate Value Booster.
Sign up now for the July 16 NPS – First Advantage Webinar: How Rent From Payroll Improves Screening Results for Three Case Companies.