Ways to Work Application Information
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Upon receiving an initial inquiry, a loan counselor begins a rigorous, one to two month loan approval process in order to assess a potential client’s eligibility and optimal fit for the program. The nature of the Ways to Work program requires a larger upfront time investment than is typical for mainstream lenders. Given a client target population that is defined by poor credit scores, Ways to Work can make only limited use of an applicant’s credit score as a metric to assess risk.
Program offices, therefore, employ a character-based lending approach that maintains program efficacy and a low default rate by ensuring that, before the loan is approved, clients have the commitment and potential to be successful. Overall, six percent of inquiries and 31 percent of applications result in funded loans.
Applicants work with the loan counselor to build and refine a family budget, review and plan repairs to their credit report, and produce a personal statement of intent. Because of the integration of financial literacy training with the application process, all applicants benefit from some level of family budgeting, credit repair discussions, or other associated education.
Ways to Work Loan Committee
Five to eight community volunteers meet on a regular basis to review applications. This volunteer loan committee typically includes representatives of the host agency, local financial institutions, local funders, and other community representatives. In evaluating applications, loan committees carefully weigh the recommendations of the loan counselor and the applicant’s overall financial status, character, debt history, and employment status.
The committee reviews all applications on a blind basis – that is the applicants name is replaced with a code number on all documents reviewed by the committee. If an application is declined, the applicant receives an adverse action notice from the local WtW office. If approved, they receive an approval notice. It is common for the Loan Committee to issue conditional approvals with specific issues to be addressed by the applicant prior to loan closing. It is also common for rejected applicants to be offered the opportunity to reapply when specific issues on their application are addressed.
Post-Approval
If approved for a loan, an applicant must then locate a car for purchase and arrange for insurance before the loan is finalized and loan funds are disbursed. Most agencies have identified preferred car venders to assist applicants with the car buying process. Nearly all agencies require a pre-purchase inspection prior to closing.
Case Management during Loan Term
A key differentiation between WtW and most other car acquisition programs is that WtW’s case management method and high-touch approach help to ensure that clients themselves have the motivation and capacity to pay back their loans. Individualized troubleshooting, ongoing education, and referral to complementary services all help clients to navigate the very circumstances that make them eligible candidates. This is a key success factor for the WtW program model - by paying back their loans in full and on time, clients demonstrate the potential to later access credit from mainstream financial markets.
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Loan Eligibility Criteria
The national network of local Ways to Work loan offices provides small loans to qualified low-income applicants in accordance with the national office’s minimum loan eligibility criteria. Local loan offices, and as approved by the national office, may modify the length of employment criterion or require qualified applicants to meet additional loan eligibility criteria.
The minimum loan eligibility criteria for applicants are:
- Continuous employment for at least six months or
- Involved parent(s) of dependent child(ren), and
- Have exhausted conventional loan resources, andv
- Have disposable income sufficient to make repayment (for no more than a two year term and at an interest rate at no greater than 8%) , and
- Have a household income no greater than 80% of the area’s median income, and
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Pre-Qualify Self Test
Ways to Work loan offices make loans (up to $4,000) to help qualified, low-income applicants remain employed or stay in school. Approved applicants make monthly loan payments over a two year period at no more than eight percent interest.
You might qualify to receive an application if you say “yes” to all the following questions:
- Have you been employed for at least six months?
- Are you a parent?
- Are you unable to get a loan from a bank or credit union?
- Will you agree in writing to repay your Ways to Work loan?
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If you said “yes” to all of the above questions, please contact:
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Arlington Chamber Foundation
Ways to Work Program
505 East Border
Arlington, TX 76010
Phone: 817-543-4308
Fax: 817-261-7355