Employers are searching for ways to compete and succeed in today’s fast moving marketplace. Employer Assisted Housing programs from Fannie Mae are a benefit that many companies are now considering. EAH plans are gaining momentum because they make an employer have a more desirable place for an employee to work and are great as a recruiting tool.
What Is Employee Assistance Housing Program?
Employer Assisted Housing or EAH for short typically involves a partnership among the employee, Fannie Mae, employer and the lender. Essentially, EAH is down payment assistance given to the employee from the employer. The employer offers the employee this benefit most often in the form of a grant, forgivable loan, or matched savings plan.
How Does A Employee Assistance Housing Program Work?
Payback of the plan can be deferred, forgivable, or repayable, all of which are based on some employer imposed requirement. One example of what the employer might require is that the employee must agree to stay with the company for a period of time. EAH can be thought of as like a retirement plan, where the employee must stay with the company for a specified period of time to get the full benefits of the company’s contribution to the employee’s housing down payment.
The employer has their requirements (see below for an example of FNMA’s own requirements for its program that it runs with its own employees) as well as Fannie Mae. Fannie Mae requirements center on the individual completing home buyer education and qualifying for the mortgage loan. Once the employee meets the company’s requirements (whatever they may be) and Fannie Mae’s the employee can participate in the company’s EAH program. The EAH program provides several ways to benefit employees, these include: down payment assistance, security deposits or monthly rent payments.
Fannie Mae Has Its Own Employee Assistance Programs
Fannie Mae started its own EAH program back in 1991 for its employees in the form of a forgivable loan. Since then, nearly 2500 Fannie Mae employees have taken advantage of this opportunity. Fannie Mae requires that an employee must work a minimum of 180 days to become eligible and remain with the company for 5 years to receive the full forgiveness of the benefit. If the employee leaves the company before the 5 year period is over, the employee is required to pay a portion of the benefit back to Fannie Mae.
While there are some Fannie Mae mortgage programs that provide 100% financing (these are not discussed in this article) most Fannie Mae loan programs require some form of down payment. Mortgage companies utilize the EAH as a form of down payment to provide home mortgage financing for the employee.
Fannie Mae is helping companies across the United States develop their own EAH program. They can help yours as well. Employees who obtain an EAH benefit will get help with one of the three main obstacles in buying a home. That would include closing costs, down payment and information about going through the home buying process.
Companies Taking Economic Precautions By Cutting Benefits
As it stands now, most employers are cutting back on benefits. If you are an employer and are focused on finding and recruiting the best talent, EAH is a nice perk to be able to offer current employees as well as prospective employees. If a potential employee does not own a home, this could be the incentive that has them pick you over another company.
If you are interested in setting this up at your company please visit eFannieMae.com for more information.
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