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TRANSACTIONS NEWSLETTER ONLINE

November/December 2006

Merit Awards:
Ways to Work Family Loan Program:
Helping Families Transition From Welfare to Work

Ways
Rosetta Fort’s Toyota Corolla, purchased with a Ways to Work auto loan, has helped her provide for her children, Jazra (left) and Justus (middle). (Photo: Noah Berger)

Two years ago, Redwood City resident Rosetta Fort was seven months pregnant with her second child, didn’t own a car and could not qualify for a loan because of a poor credit history. She was constantly on SamTrans buses, taking her 8-year-old daughter to and from school and getting herself to doctors’ appointments. “It was getting really hectic,” she said.

Then she saw a church bulletin about the Ways to Work Family Loan Program run by the Family Service Agency of San Mateo County. The single mom qualified for a low-interest loan and bought a used Toyota right before her son was born. Today, Fort says that owning a car has changed her life dramatically, allowing her to take care of her children and to take a second job because she has reliable transportation.

The first of its kind in California, the program provides 4 percent interest loans of up to $4,000 to struggling families — 84 percent of participants are single mothers — for the purchase of a used car. The program began in 1998 by offering a broad spectrum of services including essential childcare and deposits for housing, but now dedicates itself to providing loans for auto purchases and repairs.

“We’ve found that the best way to help families become self-sufficient is to get them into an automobile,” said Carlos Valenzuela, the program’s director. “Families typically jeopardize their employment because of transportation issues. The costs and complications of transit are often a barrier, so parents stay closer to home and sacrifice possible income.”

The program requires that loan recipients attend a personal financial management class, and then helps them to find a reliable used car. “It’s an educational experience for them,” explained Valenzuela.

Since its inception, the Ways to Work Family Loan Program has helped over 200 families and approved loans totaling $700,000. The average loan recipient’s income increases by 17 percent over the first six months, with a 92 percent reduction in missed work time. And, the average borrower’s use of public assistance drops by 40 percent within two years.

Of all the loans given since 1998, 75 percent have already been fully repaid. Valenzuela attributes the program’s amazing success with a high-risk population to the relationships that are built as part of the process.
— Karin Betts

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