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Madelyn Lazorchak, Communications Writer07/07/2021

One of the most effective ways NeighborWorks America's financial counselors help clients at NeighborWorks network organizations is by playing matchmaker. They identify the programs that can best lead their clients toward financial stability and independence. Programs like rent reporting to build credit and incentivized savings can make a real difference, says Molly Barackman-Eder, director of financial capability at NeighborWorks America. Those programs can be found throughout the NeighborWorks network.

On Track in Vermont

Champlain Housing Trust, a NeighborWorks network organization in Vermont, has "On Track," a program meant to help residents who are late with rental payments get back on track through financial counseling. Residents who miss payments receive a letter, asking if they'd like to receive counseling, explains Robert Leuchs, director of Homeownership Programs at Champlain Housing Trust. A graphic shows that the road to homeownership has many individuals unsure of their credit scores.

Those who agree to enter the program are able to work with counselors on a payment plan for past-due rent, while looking at their budgets and planning to pay future months on time. "We help people adjust their budget so they can afford to pay," Leuchs says. "We give them options." Housing counselors also try to connect residents with benefits and other programs that will help. 

Champlain Housing Trust launched On Track in 2015. So far, 150 people registered for the program and 120 completed the program. With the eviction moratorium ending, Leuchs says he expects to see more people signing up.

Saving with SaverLife

A family holds up keys to a new home.In the newly released NeighborWorks America Housing and Financial Capability Survey, many respondents reported using up their savings during COVID-19-related financial challenges. But saving money has always been an obstacle for many Americans. To help change habits, NeighborWorks last month revealed an incentivized savings program, available to all network organizations to recommend to clients. Individuals can sign up for the program, created with the support of JP Morgan Chase, through a NeighborWorks portal. Once registered, participants commit to saving and are eligible to win $5 to $100. 

"Saving money is important, but it can be boring and it doesn't activate that immediate ‘reward behavior' in the brain," Barackman-Eder says. "This turns it into something more exciting and helps people get motivated to save money."

The hope is that savings will become a habit. As more people join through the NeighborWorks site, NeighborWorks will be able to track how habits form over time. It can take time to create a habit, she says. "Opportunities like SaverLife and local matched programs are a great way to give people encouragement and a financial boost as they reach their savings goals. Having savings is a basic foundation of financial wellbeing."

The NeighborWorks survey showed that those who had savings went through them during the pandemic. Among those who had a financial emergency due over the last years, 73% who had been financially challenged by COVID say it will take six months or more to recover. Saving even a little means you may be able to pay rent or utilities on time. "You're not risking a late fee or a credit score."

A desire for financial coaching

Financial coaching is something NeighborWorks network organizations do well. It's also an area where individuals surveyed say they are willing to seek help, with more than 50% of survey respondents saying they wanted guidance in saving for retirement and budgeting. Nearly 50% said they wanted guidance in seeking and using credit and reducing debt and managing repayment. Financial coaches work to pair individuals with products and programs that can best help their financial situations.

Other examples of financial assistance and credit programs in the NeighborWorks network include:

  • Rent-reporting to build and improve credit. Westside Housing Organization in Kansas City, Missouri, has had success with this program, which they began in 2019 through the National Association of Latino Community Asset Builders. "Paying rent is something tenants are already doing. They already trust us," says Gloria Ortiz-Fisher, Westside Housing's executive director. Landlords report rents for tenants who sign up for the program.  When tenants pay on-time, their credit improves rapidly. The majority of the people in the program are people of color.
  • Credit-builder loans. These small loans allow clients with no track record to build a credit history.
  • Establishing bank accounts. More than 20% of individuals who responded to the NeighborWorks survey did not have checking accounts, and nearly 40% didn't have savings accounts.  That may mean individuals are getting checks cashed through check-cashing organizations that have high fees, which eat away at their income.
  • Small dollar loans. NeighborWorks network organizations with Community Development Financial Institutions (CDFIs) may make small dollar loans available, offering clients a way to avoid high-interest payday loans. 
"People's financial lives are dynamic and multi-faceted," Barackman-Eder says. It's important to have products that help. But it's also important to have a trusted advisor, like a HUD-approved financial counselor, offer guidance on how to use those products – someone who can help navigate the road to a better financial future. 


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