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A stronger community, one loan at a time

By Mike Genet mike.genet@examiner.net

For six years, one of the Community Services League’s programs has been to make small loans to help clients with safe and stable housing

A new partnership with North American Savings Bank will allow CSL to enhance the loan program. The bank’s one-time gift of $100,000 will allow CSL to provide housing loans up to $2,500 that can help cover costs with transitional housing, unhealthy living conditions or minor but needed home repairs.

Brenda Johnson, a loan officer with Holy Rosary Credit Union, finishes paperwork for college savings accounts with a client family at Community Services League’s office in Hawthorne Place Apartments in Independence. CSL and Holy Rosary’s years-old housing loan program will receive a boost thanks to a gift from North American Savings Bank. [Submitted photo]

Since CSL and lending partner Holy Rosary Credit Union started providing loans in 2014, the program has overseen $1.3 million worth of loans. Two years ago CSL absorbed the non-profit NextStepKC, which was formed during the Great Recession and had been making similar assistance loans, and used that name for its existing program.

“This is really taking us to another level with this initiative,” Cowan said of the NASB partnership, adding that he believes it will ultimately be more than just a one-time gift. “What we’re trying to do is not necessarily create loans, but to address gaps in our community.

“We’re working to keep people safely housed, and there’s a lot of needs that fall in the cracks.”

CSL does plenty of direct monetary assistance for rent or utilities, helps clients set up college saving accounts and also has two loan initiatives. One is a lifeline loan of up to $1,000 when a client has a sudden large expense or income disruption they might not otherwise manage.

“That’s designed to get people to not walk into a payday loan place or turn their title over to a title loan,” Cowan said.

The housing loans, which will be boosted by NASB’s gift, are meant to maintain safe housing stability and can go up to $2,500. In both cases, monthly income determines how much a participant may borrow up to the caps, Cowan said.

For example, a client might have pests or mold in the house, but fixing the problem can be costly.

“We have a lot of people that walk through our doors and have bed bugs,” Cowan said. “It’s not safe; it’s not healthy. Or it might be some other pest or mold.” 

To get rid of bed bugs in an apartment, he said, could cost up $1,000 and take three days, and an alternate place to live in the meantime adds another expense.

Clients might also be living in a hotel/motel or doubling up with another household as they try to find a new place to live, Cowan said. 

“They might have a past due utility bill they get out from under, maybe even thousands of dollars, or they have a previous eviction they need to settle,” he said. “If they can’t settle that bill, they can’t turn on new service.

“We can help people get a fresh start.”

For NASB, the partnership is part of its Community Reinvestment Act commitment. That law, enacted in 1977, encourages financial institutions to help meet credit needs in their communities, including low- and moderate-income neighborhoods.

“I’m excited to see the launch of this partnership, especially now at this critical time when so many people are hurting, because it addresses NASB's commitment to helping people in our community who struggle financially," Sarah Baharin, vice president of residential lending, said in a release. "When we looked at areas where we can have a real impact, we saw the gap that CSL and their NextStepKC program is filling. This will amplify the work they’ve been doing.”

Cowan said NASB’s gift also helps CSL keep its interest rate relatively low (six percent for a housing loan) and helps provide financial coaching for clients. He emphasized that CSL doesn’t look to replace a bank but to help clients work with a bank again.

“We don’t want people to be involved with NextStepKC forever,” he said. “We try to be a springboard for a better banking relationship.

“We’re not a bank; we don’t want to be a bank, but we try to rebuild that trust.”