Our Program Overview

Investing in the future of families

ACLF provides loan products to colonia residents who have no access to traditional financial institutions. It invests in the future of the families by providing low or no-interest loans for housing, micro-businesses, human development, community development, and basic consumer needs to enable colonia families to become full participants in American society. (See "A Snapshot of Hidalgo County" below.)

Flexible financial products

Recognizing this growing need for affordable and flexible financial products, ACLF has developed its loan products with interest rates and terms that match this population’s capacity for repayment. Currently, ACLF provides all of its loans at low or no interest, and assesses the family’s current income status in order to determine loan repayment amounts.

ACLF has developed loan repayment schedules that are designed to be affordable for this income level, with payments usually ranging from $75.00 to $150.00 per month, depending on the loan type, amount and particular circumstances of the family. Loan repayment terms and conditions are delineated in the loan documents.

Loan criteria

Additionally, while traditional lenders typically look to current income and length of employment as a primary criteria for loan approval, ACLF takes the cyclical or temporary nature of employment of many colonia residents into account and will not exclude them based upon a seasonal employment history. Additional accommodations have been made to better meet the needs of the target population, for example, allowing loan recipients to escrow future payments in anticipation of periods of little or no income.

ACLF lending policies

Further, while an inadequate credit history will frequently prevent colonia resident from obtaining loans from traditional lenders, ACLF’s lending policies focus on the human side of the equation, placing greater emphasis on need, as well as other factors such as the potential for growth of a family business, the determination to succeed, and/or the level of desire for homeownership.

Finally, in keeping with the philosophy of managing risk through relationships, ACLF does not require conventional collateral for the loans it makes. Instead, ACLF encourages families to take responsibility for their homes from the program’s inception, through sweat equity and home ownership training, and thereby builds strong relationships with each family. It is this close relationship that ACLF fosters and maintains with the participant families that serves to “guarantee” the loans.

ACLF is the only loan fund in the region that meets the non-traditional needs of this community, and serves only those families who earn at or below 50% of the area median income.


A Snapshot of Hidalgo County


According to the U.S. Census Bureau Survey of Economic Characteristics released in 2006, of 233 counties in the nation with populations of 250,000 or more, Hidalgo County has:
* the lowest median household income at $28,660
* the highest poverty rate at 39%
* the highest child poverty rates at 47.8% and
* the highest poverty rate for families with women head of households at 51.2%.

Even in Hidalgo County’s only Metropolitan Statistical Area, the McAllen-Edinburg-Mission MSA, the most recent estimates of the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department indicate a per capita personal income (PCPI) of $15,184, or just 48% of the national average of $31,472.

This level of PCPI ranks the McAllen-Edinburg-Mission MSA last of the 361 total MSA’s in the nation. In serving the rural areas of the Lower Rio Grande Valley area, ACLF works exclusively within an area the USDA Cooperative State Research, Education and Extension Service considers persistently poor, a designation used when an area has poverty rates in excess of 20% continually for the last 50 years.


According to a 2006 issue of the Wall Street Journal, since the introduction of the North American Free Trade Agreement (NAFTA), the once isolated agricultural Rio Grande Valley has experienced explosive growth and has become a retail Mecca for corporate sales to rich Mexicans and Mexican businesses.

The Wal-Mart in McAllen has the highest grossing sales in the country and La Plaza Mall has the highest grossing annual sales per square foot in the country ($650). In addition, there are over one million maquiladora (assembly plants) workers across the border in Mexico. The managers and technical assistants needed to support the maquiladoras are imported to the region and live on the US side of the border.

The rapid growth has resulted in increasing the cost of living for the poor as the price of real estate has escalated. The Texas State Comptroller in his 1998 report titled “Border Future” examined this situation and concluded that the border has experienced growth without prosperity. NAFTA activities have generated new jobs resulting in the reduction of the unemployment rate, but most jobs are created by the retail industry and are part-time minimum wage jobs.

Although unemployment rates have continued to decline with the creation of retail jobs, the most recent Texas Workforce Commission reports an unemployment rate of 16.4% in Hidalgo County, as compared to 6.1% for the state of Texas. While unemployment rates in Hidalgo County have typically been 2 to 3 times higher than the national average over the past 10 years, among the colonia communities served by ACLF the rates are substantially higher than those for the county as a whole.


Low educational attainment is another factor that perpetuates the cycle of poverty in Cameron and Hidalgo Counties and the economic despair of the rural colonias.

The 2006 U.S. Census estimates that there are 372,879 residents aged 25 years or older in Hidalgo County, with 98,249, or 26.3%, having less than a ninth-grade education;

50.5% of Hidalgo County residents are estimated to have completed high school, as compared to 75.7% of Texas residents statewide, and 80.4% of residents of the country as a whole.

These low educational attainment rates correspond with the equally low income levels that are prevalent in the Rio Grande Valley area. Again, educational attainment rates for colonia residents are substantially lower than those estimated for the county as a whole.

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