# Hebrew Free Loan Society of New York

The Hebrew Free Loan Society (HFLS) of New York, also known as the Hebrew Gemilath Chassodim Association, founded in 1892, is the oldest money gemach in the United States. It spawned similarly named free-loan funds in many other cities, including Washington, D.C.; Philadelphia, Pennsylvania; and Holyoke, Massachusetts.
The Hebrew Free Loan Society is an organization that has been serving the community since 1892. Rooted in Jewish tradition, it provides interest-free loans to residents of New York City's five boroughs, Westchester, and Long Island, regardless of their ethnic heritage or religion.
HFLS offers a variety of loan programs tailored to different needs, such as small business support, education, health care, housing, and even adoption or fertility treatments.
It is considered to be a “benevolent loan provider,” and not a bank or credit union.
Cited as an example of how American Jews had "developed some of the most impressive philanthropic networks in the world", the free loan society has made made more than $380 million in loans since its founding, with a 99.9% repayment rate.

## History

The organization was founded on Henry Street on the Lower East Side in 1892 by a group of 11 men who contributed $95 towards making free loans. The organization's mission to make "free loans" was based on adherence to Jewish law prohibiting charging interest on loans, based on such biblical admonitions as the verse in Exodus (22:25) stating "If thou loan money to My people, to the poor by thee, thou shalt not lay upon him interest." As to motive for these efforts, "Edward A. Filene, a Boston Jewish department store owner and philanthropist, encouraged low-interest loans because, in his own words, he wanted to 'fight the age old prejudice that all Jews were usurers.'"
Shortly after the organization was founded, financier Jacob Schiff became a regular donor to the organization. Other early benefactors included philanthropists Baron Maurice de Hirsch and Baroness Clara de Hirsch, as well as Adolph Lewisohn.
Using money provided by contributions, the society provides small, interest-free loans which are paid back in regular installments. The group made $1,200 in small-denomination loans in its first year, repaid in ten equal monthly payments and guaranteed by someone with good credit, which had expanded to more than $360,000 loaned to 15,000 borrowers by 1905. Their mission was to make a discernible difference in the community.
At their peak, there were more than 500 such societies operating in the United States. Additionally, there were hundreds more that were ancillary with synagogues and fraternal organizations. They provided capital to immigrants who were unable to attain loans from traditional sources, such as banks. In 1920 alone, the Hebrew Free Loan Society of New York distributed more than a million dollars to Jewish-owned small businesses.
The Great Depression resulted in a spike in borrowing in 1929 to more than $1.1 million in loans, almost triple the $400,000 loaned five years earlier, much of it made to small business owners who could no longer borrow from traditional banks. For the year 1929, the organization reported that borrowers had defaulted on less than one-tenth of a percent of all loans that had been made the previous year.
Real estate investor Joseph Durst, founder of The Durst Organization, served from 1945 to 1972 as president of the society.
In the early 1970s, the Free Loan Society made a series of larger loans to Chabad Hasidim who were making down payments on homes as part of an effort to help maintain the core of the Jewish community around the organization's headquarters at 770 Eastern Parkway in Crown Heights, Brooklyn, that had seen many white residents leave the neighborhood.</ref>
By the 1980s, the Free Loan Society was making $2 million a year in free loans, by which time the organization had made more than $80 million in loans. While most of the loans are made to Jews, the organization is non-sectarian and has donated to people of varied backgrounds and religions. In 1982, the organization reported that all but $100 of the $2 million in loans had been repaid, with most defaults historically being related to the death of borrowers.
From 1892 and as of 2023, the Hebrew Free Loan Society has provided more than 900,000 borrowers with more than $400 million in interest-free loans.
The Hebrew Free Loan Society entered into a partnership with the Colin Powell School for Civic and Global Leadership at The City College of New York "to provide interest-free emergency loans of up to $2,000 to currently-enrolled low and moderate-income students."
Their archival records repose at the American Jewish Historical Society.

## Loan criteria

The Hebrew Free Loan Society (HFLS) determines loan eligibility based on four key criteria:
* Residency: Applicants must live in New York City's five boroughs, Westchster, or Long Island, New York.
* Income: Household income must fall within low to moderate levels, as defined by the Department of Housing and Urban Development's guidelines. Specific income limits vary based on household size.
* Guarantors: Depending on the loan program, applicants need one or two qualified guarantors. These guarantors must have good credit, meet their current debt obligations, and demonstrate the ability to repay the loan if necessary.
* Purpose: Loans are provided for specific needs, such as education, healthcare, small business support, or emergencies. Each loan program has its own requirements. Business loans are available.
HFLS is non-sectarian, which means that applicants do not need to be Jewish to qualify.