loan program works to help Nebraska families get cars | Nebraska News

OMAHA – Daughter’s trip to the orthodontist? It will not arrive.

Lost a day’s pay because you couldn’t get to work? Pity.

For low-income families struggling with bad credit, the lack of a car in the vast Omaha-Council Bluffs metro area is both a threat to family earnings and a minefield of stress.

This is changing, one family at a time. The Omaha area’s largest program to get cars into the hands of low-income, credit-struggling families is growing, now that Boys Town has signed a partnership with Heartland Family Service.

The two local groups coordinate low-interest loans funded by the national Ways to Work program. They hope to help 80 to 100 metropolitan families to get cars every year. It would be a huge addition to the 169 loans Heartland has made in its first five years.

While the effort pales in comparison to the needs – around 8,000 poor households in the metropolitan area lack vehicles – it is a start.

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“Omaha is a very difficult city to get around if you don’t have reliable transportation,” said Melissa Steffes, Ways to Work coordinator for Boys Town. “It can limit your earning potential.”

The bus system is helpful, but its coverage isn’t wide enough, said Steffes and her Heartland Family Service colleague, Lisa Picker.

For example, said Picker, a Bellevue mother who got a car loan from Heartland had walked a mile each way to the bus stop with her children, including a baby in a stroller — even on the busiest days. hot and cold.

Ways to Work was started by the McKnight Foundation in Minnesota in 1984 as an extension of welfare reform, according to its national executive director, Matt Mueller.

Expecting parents to climb out of poverty without a car is generally unrealistic, Mueller said. Many entry-level jobs are in suburban malls and malls with no bus service, he said, and some parents have to commute to multiple low-wage jobs in different locations to join the two. ends.

In the Omaha area, about 24% of poor households don’t have a car, said David Drozd, research coordinator for the Center for Public Affairs at the University of Nebraska at Omaha. Only 4% of non-poor households do not have a vehicle.

Grace Huerta, a mother of three and the first recipient of a loan from Boys Town, was without a car for about eight months after her 20-year-old Jeep broke down last summer. The bakery worker got by by taking trips to work with her sister or borrowing her sister’s similarly aged Mercury Sable.

Nothing was easy, she said. Although she and her sister worked at the same bakery, their shifts differed. And it wasn’t always possible to juggle work schedules and bring kids to doctor’s appointments and activities. When it didn’t work to borrow a car, those trips also failed.

“It had a domino effect,” Huerta said of the stress and problems caused by not having a car.

Huerta, who earns $25,000 a year at her job, has a poor credit rating and couldn’t get a loan she could afford.

Through the Ways to Work program, Huerta pays an interest rate of 8% on an auto loan of $8,000, the maximum amount loaned under the program. While 8% is higher than the rate available to someone with good credit, it’s far better than the choices faced by those with poor credit, Picker and Steffes said. Predatory lenders typically charge more than 20% interest, they said.

Huerta bought her crimson red 2010 Dodge Avenger from Woodhouse Mazda, and the vehicle gave her and her family a sense of normalcy.

“I love it,” she said. “Things have changed a lot. It’s easier for me and my children have more confidence in themselves.”

Parents must take personal finance classes at Boys Town or Heartland before getting a loan and then receive one-on-one coaching throughout the life of the loan. Both agencies also vet dealerships and have cars inspected to ensure they are reliable. The two organizations also bear the cost of bad debts, which average 12% nationwide.

Together, the two agencies expect to spend about $300,000 a year running the program, and they are talking to local donors to support their efforts.

The national group found that 82% of loan recipients who received government assistance are able to withdraw that assistance. Nearly half are late for work less often or miss fewer days to work, and half eventually receive a raise or promotion. About 25 percent become more educated.

Mueller said many people confuse this program with simply connecting a family to a car. But he added that an added benefit for families is their long-term relationship with local groups such as Heartland and Boys Town, which can help families overcome potential problems.

“That’s where the magic really happens – those inflection periods in people’s lives when someone starts to become delinquent on a loan,” he said. “Their issues may not be financial, and because we’re involved and know the complexities of their lives…that’s where the trajectory of their lives can change.”