When Ana Marcia, who’s from Honduras, started the path to U.S. citizenship, she realized it was going to be expensive. She needed $5,000 for attorney’s fees and to file her paperwork with the U.S. Citizenship and Immigration Services (USCIS), which she didn’t have.
So Marcia, who lives in Providence, Rhode Island, turned to the Capital Good Fund for an immigration loan in 2015. About a year later, she received her green card, which has helped her get a work permit, obtain a driver’s license, start a cleaning business, boost her credit score and purchase a new home for her family, including her husband, 16-year-old daughter and 11-year-old son.
“It’s been really beneficial because traditional banks wouldn’t lend to people like me in the immigrant community,” she says. “Getting your legal paperwork is really crucial to getting your start in this country.”
Once she got her own paperwork, she was able to help her husband get his work permit, too.
Research shows that the high cost of naturalization often prevents low-income immigrants from becoming U.S. citizens. The current fee for filing a USCIS application is several hundred dollars alone, but that’s just a starting point for the costs many people incur.
Andy Posner, founder and CEO of Capital Good Fund, a Providence-based CDFI, says the immigration system is “extraordinarily complicated,” and the costs go up if someone is filing paperwork for a family with multiple people. Some people may have other costs, like obtaining documentation such as birth certificates, medical exams, travel or legal fees.
“As with most legal matters, the better your representation, the more likely you are to win your case,” he says. “And to get good legal counsel, there’s a cost.”
Immigrant communities are often low-income and can’t cover these expenses with cash, Posner added. They also often lack a credit score which is needed to get a traditional loan, so the only option tends to be a predatory lender that traps borrowers into paying expensive, long-term fees or holds someone’s green card as collateral until they repay the loan.
Waiting to save up money to pay the costs for citizenship is risky, too, Posner says. The immigration laws might change or someone might get deported in the meantime.
Capital Good Fund is one of a number of CDFIs that helps immigrants with their cases. The organization offers immigration loans of up to $20,000 with a 12% to 15.99% annual interest rate and no closing fees or down payments. Loans are repaid monthly over two to four years. Posner says the CDFI’s average loan is about $5,500.
Since 2009, Capital Good Fund has financed 446 immigration loans worth more than $2 million.
“The ultimate impact of this loan is that you have a hardworking immigrant that gets to improve the status of himself or herself and their family,” he says. “That can mean removing the fear of deportation.”
To qualify, borrowers must have a bank account and an income and live in one of the 10 states where the loans are available, including Rhode Island, New Jersey, Florida, Texas and Colorado.
Borrowers are offered financial coaching, but it’s not a loan requirement.
Once someone gets a green card, finds a job or starts a business, they can start paying taxes, which contributes to local economies, Posner adds. It also helps someone improve their credit score, as the loans are reported to the three main credit bureaus.
Capital Good Fund recently launched a partnership with the American Immigration Lawyers Association (AILA) and plans to expand the immigration loans in other states. The CDFI is the preferred lender of AILA, and attorneys make referrals to the organization.
“We only work with highly vetted attorneys to protect the customer and our portfolio, so it’s important that they get good legal representation,” Posner says.
The market need for immigration lending is about $500 million, Posner estimates. And, CDFIs are uniquely positioned to fulfill that need.
“We have more flexibility,” he says, since CDFIs aren’t “depository institutions” or regulated like banks.
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.
Erica Sweeney is a freelance journalist based in Little Rock, AR. She covers health, wellness, business and many other topics. Her work has appeared in The New York Times, The Guardian, Good Housekeeping, HuffPost, Parade, Money, Insider and more.