It's no secret that even with the latest layoff announcements from high-tech and Internet start-up companies, skilled labor and high-tech talent remain in high demand.

So how do you attract top employees and keep the ones you've got? One approach is to offer employer-assisted housing -- EAH -- to help workers get that first home.

Under such programs, the employer provides a grant, forgivable loan, matched savings plan or other benefit. The general idea is that such inducements reward employees who stay with the firm.

Fannie Mae, as one example, has a program for its own employees by offering a forgivable loan. Since its inception about 10 years ago, more than 1,300 employees have used the program. Eligible employees must work 91 days for Fannie Mae and remain at the company an additional five years to have EAH loans fully forgiven.

H. Beth Marcus, director of Fannie Mae's Community-Based Lending effort, says when the program started about 6 percent of eligible employees took advantage of the program each year, but that number has edged up to about 8 percent each year.

She says the program has helped tremendously in the company's ability to retain good employees. "We did an analysis for the program over the last 10 years. Those who took advantage of the program had a 25 percent less turnover rate than those who didn't," she says.

There are different benefits forms that employers can offer, according to Fannie Mae:

• Grant -- A one-time, lump-sum of money given to the employee. It may have to be repaid if the employee leaves the company within a specified time period.

• Forgivable loan -- The employer provides the employee with a second loan at the same time the first-trust loan is provided from a lender, which can facilitate the employer loan to the employee. Some or all of the principal of the loan is forgiven during a specified period of time (usually years) that the employee remains with the company.

• Deferred or repayable loan -- This type loan operates much like the forgivable loan, but there is a repayment feature at some time in the future, such as when the home is sold or the employee switches companies.

• Matched savings -- In much the same way that employers match an employees' contributions to a retirement plan, the employer matches savings by an employee for the down payment money. The employer can either accrue the dollar amount on the company's books for an obligation to provide a grant at closing or cash deposits (dedicated for the home purchase) are made into an employee's account.

• Home-Buyer Education -- While this program may not involve actual money changing hands, just offering employees the knowledge of how to purchase a house could be all the employees need to acquire a home. Such programs can help eliminate the mystery of the home-buying process and instruct potential buyers on what they need to do to improve credit, save for a down payment and get approved for a loan.

Over the past 10 years, more than 250 groups have established EAH programs using Fannie Mae's help. With a renewed emphasis on the program, Ms. Marcus says 31 percent of those have signed up in just the last 12 months. Employers should keep in mind, however, that there are several tax issues associated with housing benefit plans.

"Typically, housing benefits are taxable to the employee and result in a commensurate tax reduction for the employer," according to Fannie Mae. "Specific treatment will vary with the employer's location and type of business, as well as the specifics of the EAH plan."

Not to be outdone, FreddieMac also offers an array of EAH programs. Examples include the Alt97 program, HomeWorks, Affordable Gold 5, Affordable Gold 3/2, and lease-purchase programs.

Mr. Carr has written about the real estate for more than 12 years.

Published: April 20, 2001

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Mr. Carr has covered real estate since 1989. He is the author of Real Estate Investing Made Simple. Got a personal real estate issue? Post your questions and comments at Anthony’s blog: commonsenserealestate.blogspot.com.