During a homebuyer seminar, Yvette Sims realized credit card debt was keeping her from opportunities like homeownership.
Despite paying every month, her debt wasn’t moving, Sims said.
“I pay all my bills on time, always have,” she said. “But it just wasn’t making a difference.”
That was before a housing coach connected her to the Milwaukee Jewish Free Loan Association and changed what she thought was a never-ending cycle.
The Milwaukee Jewish Free Loan Association, 409 E. Silver Spring Drive, is a nonprofit that provides interest-free loans and other financial solutions to people of all faiths in southeastern Wisconsin.
Sims received a loan from the organization through its Debt Reduction Loan Fund. The loan covered her debt and allowed her to pay it back interest free.
“I am just grateful that I was told about this opportunity,” Sims said. “I didn’t realize how much it would help me progress.”
‘It’s a hand up, not a handout‘
Launched in 2023, the Debt Reduction Loan Fund, provides interest-free loans to people working with local housing agencies. The loans help them pay off high-interest credit cards, predatory loans or Internal Revenue Service debt.
The goal is to help people overcome all obstacles that can prevent them from qualifying for a mortgage.
Anna Koenig, executive director of the loan association, said that while the organization’s name contains “Jewish,” its services are available to anyone. Its model is built on the Jewish teaching that prohibits charging interest to those in need.
“It’s a hand up, not a handout,” she said. “Clients repay exactly what they borrow, nothing more. And their repayments help fund loans for the next family.”
The first $50,000 pilot fund was financed by Bader Philanthropies and supplemented by private donors.
In 2024, the Zilber Family Foundation invested an additional $160,000 to expand the program to new partners.
Rising rents, stagnant wages and the growing cost of homeownership all make it harder for Milwaukeeans to build wealth, Koenig said.
How it works
Residents, like Sims, qualify for the debt-reduction loans through referral from one of four housing agencies and organizations: Acts Housing, United Community Center, Habitat for Humanity or Housing Resources Inc.
Unlike the association’s traditional loans, which require a co-signer, participants in this homeownership pathway can forgo that requirement.
Instead, financial coaches at the partner agencies serve as a bridge.
The coaches help clients repair their credit, manage debt and prepare for the mortgage process.
The association, housing agencies and financial backers realized that for many households, the process of buying a home is stalled by the weight of debt with high-interest rates.
The interest-free loans change that math overnight.
Sims, a Milwaukee resident and dedicated Milwaukee Public Schools teacher, said that while she didn’t have much debt, it was keeping her from where she needed to be.
After she received an interest-free loan to pay off her credit card balances, she was able to increase her credit score and is now one step closer to becoming a homeowner.
Growing interest
Koenig said the Debt Reduction Loan Fund has continued to grow and is now available countywide.
“This really sparked interest,” she said. “Other agencies saw its impact and wanted to replicate it for their clients.”
While not every borrower has purchased a home yet, the loan association has seen clear signs that the model works: reduced debt loads, repaired credit and immediate financial breathing room.
“My credit has never been this good before,” Sims said. “It feels like I can buy whatever I want. But I also learned through the program the discipline of not just spending because I have it.”
Jaquetia Tate, homeownership specialist with Housing Resources Inc., said the program is amazing because it gives people a chance to get ahead.
“Many of the people we work with have the income to make their payments and pay their bills,” Tate said. “This program gives them the ability to save money, build credit and prepare for other financial goals.”
Community support needed
With just two staff members, the loan association relies heavily on community awareness.
“Getting the word out is huge,” Koenig said. “People often don’t know this resource exists or they assume it’s only for the Jewish community. It’s for everyone.”
Donations help, she said, but so does simply telling neighbors and clients that an interest-free option is available.
The Milwaukee Jewish Free Loan Association operates like a nonprofit, interest-free community bank.
Repayments cycle back into the loan pool, allowing the fund to keep growing.
So far, the program has reported no defaults and an over 95% repayment rate in its pilot fund, according to Koenig.
“It’s a beautiful system,” Koenig said. “Someone gets help when they need it, they pay it back, and that allows the next person to take a step toward their future. It’s community supporting community.”
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Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
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