With founding support from Citi Community Development, the San Francisco nonprofit Mission Asset Fund announced today that it is developing and will soon launch an innovative savings and credit-building program to help low-income, at-risk foster youth and reentry populations overcome financial obstacles to securing safe and stable places to live. A pilot Security Deposit Loan program will provide low-income, at-risk youth with the means to cover their rental security deposits for their housing needs.
One in five young adults in California is underbanked 1 and often has little savings to cover rent security deposits, creating real financial barriers to securing housing. As part of the new program, Mission Asset Fund will partner with landlords, nonprofit property managers, and community based organizations that work with at-risk youth to transform security deposits into instruments to build savings accounts and credit profiles. MAF will provide housing partners with credit vouchers for security deposits and will then service the interest-free loans, report repayment activity to credit bureaus, and return the deposit at the end of the lease term to clients. By the end of the program, young renters will have credit histories and seeded savings, putting them in a stronger position to rent apartments on their own.
“We are thrilled that Citi is supporting MAF’s work to help low-income individuals become visible, active and successful participants in the financial mainstream. Once again, Citi is leading the economic development field by investing early in innovative projects that will impact people’s financial lives. We could not want for a better, more committed partner,” says Jose Quinonez of Mission Asset Fund.
“A key part of improving one’s economic potential is living in a safe and affordable home, yet the need to post a security deposit creates a barrier that is far too high for many lower income individuals,” said Bob Annibale, Citi’s Global Director of Microfinance & Community Development. “The Security Deposit Loan program not only provides the ability to finance the up-front cost of a security deposit with no interest, but Mission Asset Fund will also use the loan proceeds to help borrowers boost their savings and build a credit history that is important for getting hired, starting a business, and purchasing large necessities.”