Josephine Jackson was behind on all of her bills and her car payments when a flier inside the entrance of the grocery store caught her eye.

Responding to it, the 23-year-old Des Moines resident, who’s already been through bankruptcy, learned about Right Choice, a car loan program offered by Des Moines Citizens for Community Improvement. Launched in July, the program has already enabled 14 families to reduce their debt sufficiently to qualify for lower-interest auto loans, saving them from potentially being victimized by predatory lenders.

After completing a four-hour financial literacy class through CCI in September, Jackson qualified for a loan in the 10 percent range from Commercial Federal Bank. With it, she bought a 2000 Chevrolet Monte Carlo from Crescent Chevrolet, which provides late-model used vehicles for the program. Better yet, she learned how to take the steps to pay down her credit card debt, and is now budgeting her money so she can pay off a student loan.

”It’s really good,” Jackson said. “It’s a good feeling to know your money’s under control and to not have people calling you telling you that you owe money and you already know that. It’s good to be able to save for things that you need.”

In addition to the short-term objective of helping families get a reliable vehicle at a fair rate, the program has a broader goal of helping people put their finances in order, usually for the first time in their lives.

“We talked about this for almost two years before it actually got up and running,” said Sharon Zanders-Ackiss, director of CCI of Des Moines. The non-profit organization developed the program to provide people with an alternative to predatory dealers, who routinely take advantage of people with poor or no credit by charging them high interest rates on overpriced vehicles.

CCI put out inquiries to a number of banks to launch the program, and Commercial Federal followed through to become a partner, Zanders-Ackiss said. To date, the bank has loaned more than $166,000 through the program, an average of about $12,000 per vehicle.

“What we wanted to be able to do was provide a financing option for people who traditionally wouldn’t be eligible for financing a car,” said Christine Hensley, Commercial Federal’s vice president of community investment. “We’re very pleased with the program.”

Under CCI’s guidelines, the vehicles must be less than 4 years old and the loans must have a term of 48 months or less.

Finding a reputable dealer to work with was important, Hensley said. “We looked for a dealer that was centrally located and with a used car lot,” she said. “Bill Jensen (owner of Crescent Chevrolet) has been wonderful to work with.”

The interest rate Commercial Federal can offer to these customers, currently in the 9.5 percent range but varying depending on the age and model of the vehicle, is “significantly less than if you were to go to some of the less-desirable car operations,” Hensley said.

“The other real important pieces of it is that the vehicle has gone through servicing and we know it’s in tip-top shape,” she said. Additionally, the CCI clients who receive a loan are required to adhere to a regular service schedule to keep the car maintained.

Commercial Federal works closely with the participants to monitor the loans. It begins mediation if a loan is 20 days past due, which is significantly earlier than it does with other auto loans, Hensley said.

“We had one individual who encountered some problems because of a divorce, but early action prevented us from having to take any further action,” she said. So far, there have been no defaults.

CCI counselor Julie Chambers prequalifies the applicants before they begin the required four-hour financial literacy course. Participants know they’re expected to make changes in their spending and saving habits if they’re going to qualify to buy a car, she said.

“There are two questions I ask people when they call,” Chambers said. “How bad do you want it? How hard do you want to work for it? Those are two questions they should ask themselves before they call.”

Zanders-Ackiss said she hopes all participants will have improved their credit sufficiently by the time their car loans are paid off that they can qualify for a market-rate loan to trade up to another vehicle. Ultimately, CCI’s goal is to to pave a route toward more homeownership among participants. Four of the 14 families that have obtained loans already own a house, and each of the others has expressed interest in that goal, she said.

CCI would like to send 10 people per month through the Right Choice program, Zander-Ackiss said, for a total of 120 people this year. To reach that goal, it will need participation by more lenders, because Commercial Federal wouldn’t be able to handle that many loans of this type.

“We’ve actually had some other banks that are now hearing about it and would like to talk about it,” she said. “We’d like to broaden it, because the program has proven to be pretty successful.”

For more information about the Right Choice program, contact Julie Chambers at Citizens for Community Improvement of Des Moines, 255-0800 or e-mail her at julie@iowacci.org.