Free Loans and Housing

April 1, 2009
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Shana Novick

The highest degree of tzedakah, most famously articulated by Maimonides, is to help someone achieve self-sufficiency by means of a gift, an interest-free loan, or a partnership. Of these, only loans preserve the dignity of the recipient while also offering the possibility of enormous philanthropic leverage. That is why Central and Eastern European Jewish communities organized the so-called Gemilus Chesed, or free loan society, which our forebears then transplanted to America.

New York’s Hebrew Free Loan Society is a UJA-Federation of New York affiliate agency founded in 1892. Adapting our time-honored tool to the needs of today’s economically vulnerable, the Society’s programs now include retraining and microenterprise loans for Russian-speaking immigrants and a microenterprise program for the Hasidic community, whose economic options are constrained by limited secular education.

The shortage of decent affordable housing is one of the most pressing needs of low-income families across the country. For two decades, the federal government has dramatically cut key programs designed to produce, maintain, and subsidize housing to serve poor families.

HUD’s Section 202 Supportive Housing Program for the Elderly is this nation’s principal housing program serving older adults. In the late 1970s Congress provided funding for the development nationwide of over 21,000 Section 202 units annually; Congress’ most recent 2008 appropriation for the program will fund 3,400 units. There are an estimated 200,000 older adults on waiting lists for Section 202 housing units in New York alone. The other major federal program used by the low-income elderly is the Section 8 voucher program. Under the voucher program, individuals with a voucher find a private sector apartment and pay a portion of the rent. Only 25 percent of people nationwide who qualify for Section 8 vouchers actually get them. As with Section 202, waiting lists are enormous and years long.

Elderly immigrants from the Former Soviet Union arriving in the U.S. after retirement are almost uniformly poor. While many of them were professionals — doctors, engineers, scientists, teachers — their only current source of income is SSI (which pays a maximum of $750 a month) supplemented by food stamps and Medicaid. Thus, accessing Section 202 housing or a Section 8 voucher, both of which limit what beneficiaries pay for housing to about 30 percent of cash income, is their only hope for economic independence.

The Society’s Immigrant Basic Needs loans make it possible for modest numbers of elderly immigrants on the Section 8 waiting list who are lucky enough to be offered a voucher to take advantage of the program. To use a Section 8 voucher, recipients invariably must relocate to a new apartment. Our loans of up to $5,000 pay for moving expenses, a modicum of new furniture, first month’s security and other costs related to such a move. Thus, immigrant retirees supported by or living with their adult children can escape the humiliation of financial dependency.

In today’s economic crisis, our Immigrant Basic Needs loans also provide critical housing assistance to nonelderly immigrant families who had achieved economic stability. While not a panacea and certainly not a solution for families who now face a structural imbalance between high fixed costs and sharply reduced incomes, small loans are proving quite helpful to families who lose one of two incomes, experience a substantial reduction in self-employment revenue, or a cutback in hours. Borrowers are coming to us for loans to pay for the cost of moving to a cheaper apartment, to pay for several months of back rent once they are back on their feet, or to simply pay the rent for several months until their situation stabilizes.

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Shana Novick, a social worker and an attorney by training, has served as the executive director of the Hebrew Free Loan Society, New York, since September, 1995.

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