At home with Fannie Mae

by Maryann Hammers

Just over two-thirds of American households own their own homes. But among the 4,500 employees of the home-financing company Fannie Mae, 76 percent have mortgages.

The discrepancy is no fluke. Since 1991, Fannie Mae's signature employee benefit has been its Employer-Assisted Housing program, which consists of a five-year forgivable loan for up to 7 percent of the purchase price or median home price in the area. The funds can be used for the down payment, closing costs, or interest-rate buy-down on a new home.

"The EAH program ties directly to Fannie Mae's mission of tearing down barriers to home ownership," says Sandra Sarvis, director of the organization's Diversity, Health, and Work Life Initiatives. "What better way than to start at home and help our own employees achieve the American dream?"

The loans are available to non-management employees after 90 days on the job, and range from $5,600 to a maximum of $31,000 (in San Francisco). The average amount is $11,000. For each year the employee remains at Fannie Mae, 20 percent of the loan principal is forgiven. After five years, the employee owes nothing on the principal and pays only the interest. Employees also get one paid day off to help with moving or settling escrow.

Fannie Mae also offers a "Preparing for Homeownership" class as part of the program and holds home-buying fairs for employees.

More than 2,100 Fannie Mae employees have taken advantage of the program. Of the 523 who applied last year, 360 signed up immediately after their 90-day probationary period.

Sarvis says that in addition to boosting morale and attracting talent, the program is a powerful retention tool. "Prior to 1991, our turnover rate was 25 percent annually. Today it's between 5 and 10 percent."

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