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More companies help workers buy homes

A rising number of employers extend a benefit that helps with recruitment and fosters loyalty

Harley-Davidson is helping Mike Lea walk to work.

Not because the motorcycle manufacturer is contemplating a new line of business. Mr. Lea, a Harley employee, strolls to the office these days because his company helped him buy his own home - just three blocks from work.

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The Milwaukee-based company chipped in $2,500 toward a down payment on a fixer-upper Victorian. The money is a "forgivable loan" that will be completely zeroed out if Lea stays with the company for five years.

"It provided me with a win-win situation," says Lea, who was looking for a home that he and his wife and two sons could "grow into."

"I got a great house, I got support from my own company, and I can walk to work at the same time," he says. "It shows to me that the company is motivated to do the right things," he says.

Harley has offered the same deal for the past three years to any employee who moves into specific neighborhoods in the inner-city area where the company is headquartered.

The employee benefit is part of Harley's broader commitment to restore the local community. But it's also part of a national trend among employers who are helping workers buy a piece of the American dream, their own home.

Employer-assisted housing (EAH), as the benefit is known, is being offered by a small but growing number of public and private employers, from technology and healthcare firms to local city governments and universities.

According to a survey last year by the Society for Human Resource Management, some 6 percent of employers offer mortgage assistance to their employees, while 3 percent offer help with down payments.

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Fannie Mae, the nation's largest provider of home mortgage funds, increased efforts 18 months ago to help employers develop housing benefit programs. Since then, it has worked with some 150 employers in creating EAH packages. More than half of that total has come this year, even as the economy has slowed, according to Beth Marcus, director of housing and community development for Fannie Mae.

"Employers are looking for some cutting-edge approach that helps them recruit and retain people," says Ms. Marcus. "Unemployment is now at 4.9 percent. That's still pretty low. There are very few employee benefits that really help you retain workers. Home ownership is about as apple pie as you can get."

Housing assistance takes a variety of forms, depending on what an employer wants to spend, including forgivable loans, interest-free loans, matched savings accounts, or home-buyer-education programs. For many employers, the money invested in an EAH program is offset by savings gained by lower employee turnover rates.

Fannie Mae points out that a reduction in turnover of 1 percent for a company of 5,000 people can save the cost of hiring and training 50 new employees.

When confronted with a crisis of teacher shortages in rural school districts, the state of Mississippi passed a bill that included provisions for giving up to $6,000 toward a home purchase to teachers who promised to remain in one of the designated "critical" areas for three years. It also helped negotiate the lowest mortgage interest rates possible with local banks. Now in its third year, the program has attracted 114 teachers.

"[Before this program], we would spend thousands of dollars each year training new teachers how to address the specific needs of our school district," says superintendent Reginald Barnes, former head of the West Tallahatchie School District in the impoverished Mississippi Delta. "And the next year, they wouldn't come back.... At least you get a couple of years out of your money now."

Lisa Willis, a Mississippi teacher who just closed on a new home late last month with assistance from the state's program, says the aid was like "light at the end of the tunnel." Schoolteachers, she says, "are always trying to find a reason to stay in teaching. And this is a big help."

But not every EAH program has been a success. Sundowner Trailers, In Coleman, Okla., started offering an EAH program in mid-1999 as a way to get employees to build new homes in Coleman and to help revitalize the community. But according to personnel manager Jeremy Currie, "We had more requests from people who wanted the money to bring in trailer houses. But we wanted it to be something that would stay around for a while."

Lack of employee interest, combined with company downsizing, he says, led management to end the program this past June.

Still, many employers are enthusiastic champions of EAH programs. In the city of Whittier, Calif., police officers are eligible for a $10,000 forgivable loan if they buy a home within city limits. Human-resources director Fred Weiner says the program "makes sense from a bottom-line business standpoint as well as being something that's beneficial for our employees."

And at Agilent Technologies in Sonoma, Calif., which has offered a housing-assistance program since the late 1970s, human-resources manager Maggie Brothers says the package "absolutely" made a difference in helping the company hire employees also being recruited by other firms. "We wouldn't do it if we didn't think it was a benefit to us," she says.