Individual Development Accounts
Individual Development Accounts (IDA’s) are temporary, matched savings accounts available to eligible low income households to save for a first time home ownership, post secondary education or to start or grow a business. The accounts are time limited custodial savings accounts that match savings contributions from workers’ earnings so that people have a higher degree of dollars available to purchase an asset (National Consortium for Health Systems Development).
Many IDA’s are funded through the Assets for Independence Act (AFIA). This legislation provides federal dollars to match local funding for housing, education and starting or growing a business to individuals who work and earn under 200% of the Federal Poverty Guidelines. A guidebook for planning an Assets For Independence (AFI) project can be found at the AFI website.
To be eligible to participate in an IDA account, individuals must attend some type of financial literacy training as outlined by the individual IDA. This is to ensure participants not only save money to invest in their future but also have an understanding of how best practices in borrowing, credit, saving and other sound financial decisions can help them establish a solid base of assets and escape poverty.
Other IDA’s are sponsored and operated locally and do not contain the same eligibility requirements as AFIA. This could include funding for assistive technologies, vehicles, equipment for subsistence activities, retirement and other purposes.
Current Alaska IDA Programs
In Alaska there are three AFIA sponsored programs, the Alaska Business Development Center’s Asset Saving Program, an IDA specifically for housing at the Cook Inlet Lending Center (907-793-3038) and an IDA through the Urban League of Anchorage. Cook Inlet Housing Authority (CIHA) has a home loan program designed for individuals whose annual household income does not exceed 80% of the area median income, adjusted for family size, as determined by the Department of Housing and Urban Development (HUD) designed to increase homeownership and affordable housing in the Cook Inlet region. The Asset Building Workgroup is working with agencies across the state to increase the number and usage of AFIA sponsored IDA’s.
If you are with an agency that is interested in learning more about contributing to a statewide IDA or providing your own IDA account to individuals with disabilities or a more specific population that you serve, please contact Rich Sanders at (907) 269-5703.