Assisted by CBA, Housing Opportunity Loans to help renters with up-front fees
Charlotte, N.C., Nov. 25, 2019 -- Common Wealth Charlotte (CWC) has launched a new loan program designed to help low-income wage earners in Charlotte secure affordable housing by assisting them with up-front rental fees.
Through a $28,000 investment from Credit Builders Alliance, Common Wealth Charlotte will begin providing qualified clients $1,000 or $2,000 Housing Opportunity Loans to be applied toward the standard first month's rent and security deposit required by many apartment landlords. The loans will feature a 12-month or 24-month term, respectively, and a below-market annual percentage rate (APR) of 6%.
"For low-income wage earners in our community, the up-front fees required by rental property owners often puts affordable housing out of reach," said Chuck Jones, Executive Director of Common Wealth Charlotte. "By helping to bridge that gap with this loan program, our goal is to help those individuals and families obtain the housing they desperately need while putting them on a path toward greater financial stability."
Based in Washington, D.C., Credit Builders Alliance is an innovative nonprofit network created by its member organizations to help millions of individuals with poor or no credit participate in the mainstream financial system. CBA's investment with Common Wealth Charlotte was finalized in late October. Through repayments of the Housing Opportunity Loans, Common Wealth Charlotte expects to recycle the capital over time and underwrite additional loans for clients who face burdensome up-front rental fees.
The Housing Opportunity Loans will be provided to individuals who have completed Common Wealth Charlotte's financial education program and who meet underwriting guidelines. As part of the process, Common Wealth Charlotte will work with each borrower to ensure that their lease agreement will be manageable from a cost perspective and allow them to keep up with their monthly loan payments.
On pace to serve 4,000 clients this year, CWC provides Charlotte's economically-vulnerable families with complimentary trauma-informed financial education (TIFE), an approach to financial literacy that incorporates a deep understanding of the physical, psychological and emotional trauma experienced by low-income families. Through partnerships with banks and credit unions, CWC also connects its clients with traditional, non-predatory financial services, and the organization also provides Opportunity Loans up to $750 in size with a maximum six-month term at a 1.5-3.0% annual percentage rate (APR). Proceeds from the loans can be used for unexpected income gaps, to pay off predatory loans or to avoid priority items such as evictions and auto repossessions that adversely affect clients' lives.
About Common Wealth Charlotte
Common Wealth Charlotte (CWC) is a financial-empowerment nonprofit organization serving Charlotte's low-income wage earners, or the approximately 220,000 residents working full time and making 30 to 35 percent of the area median income (AMI). A partner to 51 local nonprofits and workforce development agencies, CWC's goal is to assist in the achievement of greater financial stability through innovative financial education, asset-building strategies and access to non-predatory banking services and loans. CWC believes financial instability underpins every challenge faced by this population, including housing, transportation, education, employment security, debt management and access to healthcare. CWC's mission to provide financial capability-building services is integral to this population's well-being, as well as to Charlotte's community-wide initiative of increasing upward mobility for its underserved residents. To find out more, visit www.commonwealthcharlotte.org.