County Loans Strike a Blow Against Homelessness : Social services: The 4-year-old program, which has a 45% default rate, has helped 174 people find or keep housing.

John Reyes thought he had no place to turn when he was temporarily laid off from work recently at a carwash in Simi Valley and his landlady started to pressure him about the rent that was more than a month late.

Reyes said he wanted to ask his family for help, but they were also going through hard times and could not spare the $900 he needed.

Reyes, who has a wife and two young boys, appealed to welfare officials for help and learned from them about a county program that provides no-interest loans to prevent evictions and to help homeless people pay for such move-in costs as security deposits.

After Reyes filled out several applications and completed an interview, officials with the Ventura County Homeless Revolving Assistance Program wrote him a check for $900, which he used to pay his first month’s rent on a new house.

“I was relieved,” he said. “I was not sure where I was going to go.”

Reyes is one of 174 county residents since 1986 who have received about $111,000 in loans and grants through the program operated by the Ventura County Commission on Human Concerns.

That the program is still assisting people such as Reyes is a surprise, according to state and county officials.

They point out that a program in Orange County, which was used as a model for the Ventura County program, failed in 1987 with a 75% default rate and $90,000 in outstanding loans. A similar program in Placer County is still operating but struggling with a default rate of about 80%, officials said.

While the default rate for the Ventura County program is about 45%, state and county social services officials say that any loan program for the needy that sustains a default rate of 50% or less can be considered a success.

The average loan is about $650, said John Servis, a supervisor who helps manage the program. To qualify, applicants must provide financial statements, references and a monthly budget, including an income projection and an anticipated expense budget, he said.

Applicants are then interviewed by a county employee before the loan is considered by a loan committee. The entire process takes about two weeks.

Servis said if a person defaults on a loan, the loan committee can turn the matter over to a collection agency or forgive the loan altogether. There are no interest penalties for a default or a late payment, he said.

The counties of Ventura and Placer are the only two agencies that use state grants to provide no-interest loans to fight homelessness, said May Waite, programs operations manager for the State Department of Economic Opportunity.

But only the Ventura County program can be defined as a success, Waite said.

“The good point is that it doesn’t just forestall evictions, it avoids them,” she said.

Waite said she doesn’t know how many cities in the state use local funds to operate similar loan programs. But because such efforts have had poor track records, Waite said she believes many cities shy away from operating loan programs for the needy.

The Anaheim Housing Authority in Orange County decided in December against operating a loan program and instead began a grant program to help homeless and low-income people avoid evictions and pay move-in costs.

“We just knew that the default rate was high,” Nan Huff, the city’s housing operations coordinator, said.

Maria Mendoza, a senior staff analyst for the Orange County Community Service Agency, said she recommended that the Orange County Board of Supervisors reject a proposal to begin such a loan program.

“I’ve just seen too many programs go under,” she said.

The Ventura County Homeless Revolving Assistance Program hasn’t always run smoothly. When the county initiated the effort in 1986, the loan program had a default rate of about 75%, Servis said.

Over the years, county officials have modified the loan qualifications to reduce the default rate to 45%, Servis said. Among the modifications was a change to expand eligibility guidelines to include anyone making up to 80% of the median income of Ventura County, Servis said.

Previously, applicants had to be below the 50% mark to qualify, he said.

Servis said the application process has become much tougher over the years and sometimes includes co-signers.

The default rate has also been reduced because cities such as Ojai and Oxnard have this year donated money to be used solely as grants for the needy, Servis said.

The most common recipients of the one-time-only loans are single mothers, low-income families or elderly people on fixed incomes, said Christy Bell, a resource developer for the county.

Cynthia Delfoss, a single mother who recently lost her job as an insurance customer service representative, said an $800 loan from the program helped her avoid being evicted from her residence in Simi Valley.

“The program saved my home because my landlord wanted my money,” she said.

Delfoss said the loan gave her an opportunity to look for a part-time job and enroll in classes at a local community college to improve her employment skills.

According to Bell, loan applicants are considered homeless if they live with relatives or rent a room in a motel. Most applicants, such as Reyes and Delfoss, request money to pay rent because they have been financially caught off-guard by a one-time crisis, such as a layoff or a death in the family, she said.

The money used for the loans comes from the cities and the county, which annually receive state grants to help fight homelessness.

Some cities, such as Oxnard, Ojai and Simi Valley, have required that the money be offered only to residents of those cities. Servis said the program now has about $37,000 for residents in Simi Valley, Camarillo and Thousand Oaks.