RELEASE: August 9, 2002

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Working parents who need emergency cash to fix or buy a car, cover housing costs or pay for child care can acquire low-interest loans through five community action agencies across the state that are administering the New Jersey Department of Human Services (DHS) Family Loan Program.

"We want to let people know that this program is available," said DHS Commissioner Gwendolyn L. Harris. "These loans can help parents meet those sudden, unexpected expenses so they can keep working. The goal is to help people before they slide into a financial crisis."

The Department of Human Services initiated the Family Loan program in early 2001, awarding $104,000 grants to five agencies serving different regions of the state. The DHS grants cover staff and administrative costs, while the agencies secured $300,000 each in private funding to establish loan pools.

The loans range from $500 to $3,000 per family, with the biggest loans targeted for cars -- up to $1,000 to fix a car and $3,000 to buy one.

So far, the five agencies have issued about $200,000 in loans, roughly 15 percent of the total funds available.

To be eligible, parents must have been working at least 20 hours per week for six consecutive months. A single parent or the head of a two-parent household is eligible. The income limit is 250 percent of the Federal Poverty Level, or $37,550 a year for a family of three.

Parents served by the program might be denied traditional bank loans because they are considered poor credit risks. The loans must be repaid over two years at 6- to 8-percent interest. The families also receive mandatory financial counseling.

In addition to car expenses, loans are available for child care (up to $800); a mortgage or other housing costs ($850); and job-related expenses, such as tools or uniforms ($500).

Loans should not be used for credit card bills, taxes, fines, business or travel expenses, or educational costs such as tuition or books.

For more information on the family loan program, call the community agency nearest to you. A list of those agencies is attached.