- Associated Press - Saturday, July 18, 2015

OMAHA, Neb. (AP) - The daughter’s trip to the orthodontist? Not going to happen.

Band practice? Nope.

Lost a day’s pay because you couldn’t get to work? Too bad.

For low-income families saddled with bad credit, the lack of a car in the sprawling Omaha-Council Bluffs metro area is both a threat to the family paycheck and a minefield of stress, the Omaha World-Herald (https://bit.ly/1OgGfMq ) reported.

That’s changing, one family at a time. The Omaha area’s largest program to put cars in the hands of credit-challenged, low-income families is expanding, now that Boys Town has signed on to partner with Heartland Family Service.

The two local groups coordinate low-interest loans funded by the national Ways to Work program. They hope to help 80 to 100 metro families a year obtain cars. That would be a sizable addition to the 169 loans Heartland provided in its first five years.

While the effort pales in comparison to the need - an estimated 8,000 households in poverty in the metro area lack vehicles - it’s a start.

“Omaha is a really tough city to get around in if you don’t have reliable transportation,” said Melissa Steffes, the Ways to Work coordinator for Boys Town. “It can limit your earning potential.”

The bus system is helpful, but its coverage isn’t broad enough, said Steffes and her colleague at Heartland Family Service, Lisa Picker.

For example, Picker said, one Bellevue mother who got a car loan from Heartland had been walking a mile each way to the bus stop with her children, including an infant in a stroller - even on the hottest and coldest days.

Ways to Work was launched by the McKnight Foundation in Minnesota in 1984 as an outgrowth of welfare reform, according to its national executive director, Matt Mueller.

Expecting parents to get out of poverty without a car generally isn’t realistic, Mueller said. Many entry-level jobs are in suburban strip malls and commercial centers that lack bus service, he said, and some parents have to travel to multiple low-wage jobs in different locations to make ends meet.

In the Omaha area, about 24 percent of households in poverty lack cars, said David Drozd, research coordinator for the Center for Public Affairs at the University of Nebraska at Omaha. Just 4 percent of nonpoverty households have no vehicle.

Grace Huerta, a mother of three and the first recipient of a Boys Town loan, was without a car for about eight months after her 20-year-old Jeep broke down last summer. The bakery worker made do by catching rides to work with her sister or borrowing her sister’s similarly aged Mercury Sable.

Nothing was easy, she said. Even though she and her sister worked at the same bakery, their shifts differed. And it wasn’t always possible to juggle work schedules with getting her kids to doctor’s appointments and activities. When it didn’t work to borrow a car, those trips fell through, too.

“It’s had a domino effect,” Huerta said of the stress and problems caused by lack of a car.

Huerta, who earns $25,000 a year at her job, has a low credit score and couldn’t get a loan she could afford.

Through the Ways to Work program, Huerta pays an 8 percent interest rate on an $8,000 car loan, the maximum amount loaned through the program. While 8 percent is higher than the rate available to someone with good credit, it’s far better than the choices faced by those with poor credit, Picker and Steffes said. Predatory lenders typically charge more than 20 percent interest, they said.

Huerta bought her crimson red 2010 Dodge Avenger from Woodhouse Mazda, and the vehicle has given her and her family a sense of normalcy.

“I love it,” she said. “Things have changed a lot. It’s easier for me, and my kids have more confidence.”

Parents must take personal finance classes from Boys Town or Heartland before getting a loan, and then receive one-on-one coaching for the life of the loan. The two agencies also vet dealers and have cars inspected to ensure that they’re reliable. The two organizations also pick up the cost of bad loans, which have been averaging 12 percent nationally.

Together, the two agencies expect to spend about $300,000 a year running the program, and they are talking to local donors about supporting their efforts.

The national group has found that 82 percent of loan recipients who had been on public assistance are able to get off that aid. Nearly half are late to work less often or miss fewer days to work, and half eventually receive a pay raise or promotion. About 25 percent become more educated.

Mueller said many people mistake this program as simply connecting a family with a car. But he said an additional benefit for families is their long-term relationship with local groups such as Heartland and Boys Town, who can coach families through potential troubles.

“This is where the magic actually happens - those inflection periods during people’s lives where someone starts to become delinquent on a loan,” he said. “Their problems may not be financial, and because we’re involved and know the complexities of their lives … this is where the trajectory of their life can change.”

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Information from: Omaha World-Herald, https://www.omaha.com

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