A rental assistance program is offering eligible La Plata County renters low-cost, fixed-rate microloans of up to $5,000 to cover the first month’s rent, last month’s rent and/or a security deposit.
The Workforce Rental Assistance Program is a collaboration of the La Plata Development Economic Alliance, La Plata County, city of Durango and First Southwest Bank.
Michael French, the Alliance’s executive director who put the program together, said Durango hospitality workers were the first ones to articulate their struggles in affording rent.
“The genesis of the program came about this summer,” he said. “We heard from those working in the hospitality sector about their rent struggles. After we talked to the city and county about what could be done to help our hospitality industry workers, we started hearing from other parts of our workforce – essential workers. They all need to be able to live here like everyone else.”
Eva Henson, Durango’s housing innovation manager, agreed with French.
“People working here should not be struggling to live here,” she said. “Just the upfront costs of renting a unit can be high with paying rent and the security deposit at the same time. This micro-lease program would help with that.”
French clarified that the city, county and First Southwest Bank are all contributing to the $150,000 fund for the pilot program.
“This is one thing La Plata County could do, and we were glad to be able to partner on this project that helps our economy and the people who keep our service industries functioning,” said La Plata County Commissioner Marsha Porter-Norton in an email to The Durango Herald on Friday.
The first-come, first-serve pilot program launched Sept. 1 and has already had a dozen applicants. Ellen Stein, marketing director of First Southwest Bank, said the number of loans will be capped at 30.
“It’s 30 for now, but there will likely be additional funds after the initial program,” she said.
The microloan program has a 2% annual percentage rate with the $5,000 maximum loan amount, resulting in 36 monthly payments of $143.22, according to La Plata Economic Development Alliance. The loan will be payable over three years with monthly principal and interest payments. No collateral will be required for the loan, and there will be no associated fees or prepayment penalty.
Those interested in the program must make 80% or less of La Plata County’s area median income (approximately $66,000) and the rental property must be located within the county. The lease agreement is for a minimum of one year, and proof of lease must be provided. The loan will be limited to one per residence, and the loan for co-borrowers will also be capped at $5,000. Because the program is limited to $150,000, those eligible who apply first will be granted the loan.
French stressed that no minimum FICO score will be required for the loan.
“Applicants won’t have to worry about credit scores, which is nice,” he said. “The bank isn’t requiring them. It’s a straightforward application. I hope people take advantage of it.”
French promised that everyone involved will continue working on solutions to Durango’s high cost of living and they have no doubt there will be more programs to assist Durango’s workforce in affording the city’s ever-increasing cost of living.
“We will definitely continue on with this after the pilot,” French said. “This is just one of many strategies and implementations the Alliance, the county and the city are working on.”