With the moratorium on evictions in Los Angeles county extended until the end of March, Jewish Free Loan Association (JFLA) anticipates there will be an increase in the demand for interest-free loan requests for rent, particularly from people who don’t have co-signers who can guarantee repayment of the loan.
JFLA recently emailed its supporters requesting donations toward a $500,000 guarantor fund that would secure these risky rent loans.
“I would like JFLA to have a larger footprint in the housing mess we have,” Rachel Grose, executive director of JFLA, told the Journal. “I think our loans can play a unique role, and we need funding for that. It can come from the city, county, individuals [and] foundations. We can lend by district, neighborhood [or]street. But we really need money to help people with rent.”
The organization estimates 30,000 people in LA are facing eviction from their homes.
For more than 100 years, JFLA has provided residents of Los Angeles, Ventura and Santa Barbara Counties with interest-free loans. The organization’s four primary loan pools are student loans, emergencies, small businesses and Jewish continuity.
JFLA provides student loans up to $7,500 per year per individual; small business loans up to $36,000 per year; and emergency loans — which cover expenses related to medical, housing, childcare, even the cost of a new refrigerator — up to $15,000 per year.
According to the JFLA website, JFLA serves an average of 1,100 clients annually.
JFLA was founded in 1904 by a group of Los Angeles businessmen who began pooling funds that could be used to provide interest-free loans to the needy. They were inspired by the biblical imperative not to charge interest to fellow Jews.
The founders’ decision to make the organization nonsectarian — meaning, interest-free loans would be provided to not only Jews but to people of all faiths, races and backgrounds — was truly “progressive.”
– Rachel Grose
JFLA’s founders’ decision to make the organization nonsectarian — meaning, interest-free loans would be provided to not only Jews but to people of all faiths, races and backgrounds — was truly “progressive,” Grose said.
The application process for a JFLA interest-free loan is relatively straightforward, beginning with an intake call to explain the purpose of the loan. An interview between the potential borrower and a loan analyst follows.
To be eligible for the loan, a JFLA client — or borrower — is required to have one or two guarantors, or co-signers, who agree to pay back the loan if the borrower is unable to do so, thus assuring JFLA of repayment.
Part of what makes JFLA as effective as it has been, with more than $15 million in loans currently in circulation, is it boasts a repayment rate of 99.5 percent, allowing loans to be recycled.
While the organization occasionally faces guarantor challenges — meaning even the guarantor cannot repay the loan, an issue that arose more often during the pandemic—the risk is often mitigated by guarantor funds provided by organizations including the Jewish Federation of Greater Los Angeles and Cedars-Sinai Medical Center.
JFLA Board President Brandon Levin runs a manufacturing company with many blue-collar workers. His company, ceramic lighting manufacturer Justice Design Group, provides interest-free pay advances. He has witnessed firsthand the impact this support can provide.
“I saw how impactful that is and how necessary it is, not only on the blue-collar level but across all levels of the income spectrum,” Levin told the Journal. Under Grose’s leadership, the total amount of loans given out by JFLA has grown. In 2017, the total amount of loans in circulation was approximately $11 million. Today, the figure exceeds $16 million.
There is massive need in the Los Angeles community; the idea that Jewish people don’t require financial assistance is misguided, Grose said. In fact, Jewish students comprise 77% of JFLA’s caseload of its student loan pool, the JFLA executive director said.
In terms of housing, 40% of JFLA’s clients say that they would have ended up homeless or in a shelter without a loan, according to JFLA leadership.
“I really feel for these people,” Grose said. “I imagine these families, including seniors living with their children, when they’re evicted. If they go to a hotel, there’s so much mental anguish, anxiety and PTSD. “I think everyone recognizes this is the number one issue facing the city.”
