As part of our process of assembling stories for our 30th Anniversary Publication, FJC contacted a number of longtime partners to ask how critical stages of their organization’s life cycle were affected by FJC’s support. We were blown away by the detailed, specificity of their responses!
For reasons of space, we condensed their testimonials in our publication, and we present them in full here.
At the height of the financial meltdown, in 2008, New Economy Project (then the Neighborhood Economic Development Advocacy Project) launched a citywide Foreclosure Prevention Gap Loan Program, geared to low income NYC homeowners harmed by predatory lending and loan servicing practices. FJC was one of two lending partners we worked with to deploy loans.
Through a donor-advised fund at FJC, we made deferred-repayment mortgage loans to very low-income homeowners, repayable only upon the homeowner’s death, sale of the home, or other change in ownership.
The Program, which we operated until December 2013, provided relatively small, low-interest loans that enabled 116 households, and a total of 386 NYC residents, avoid foreclosure. Over this five-year period, the Loan Program enabled borrowers to eliminate nearly $5 million in high-cost mortgage debt; reduce monthly housing payments by 27.1%, on average; and preserve at least $20.8 million in home equity.
The Program was designed to complement other foreclosure prevention efforts, by filling “gaps” in financing needed to obtain affordable loan modifications and other long-term solutions to keep people in their homes. Gap Loans provided homeowners and their advocates with a critical negotiating tool, which they used to secure substantial principal write-downs, short pay-offs, and sustainable loan modifications from banks and mortgage servicers.
The Loan Program added a powerful new tool to our work and that of our community partners.
Our experience with this program informed our later work creating a zero-interest NYC DREAMer Loan Fund that supported more than 1,000 New Yorkers to apply for Deferred Action for Childhood Arrivals (DACA); and our current New Economy Loan Fund, which has made close to $3 million in no/low-interest loans to support worker cooperatives, community land trusts, and other community ownership initiatives across the city.
FJC enabled us to make extremely flexible, deferred-repayment loans to very low income homeowners who were at greatest risk of foreclosure and displacement — many of whom remain in their homes to this day.
—Deyanira Del Río, Executive Director, New Economy Project
