Anyone have any experience with I.D.A's?

[gavinmccallister]

Here is the link that tells about I.D.A.'s from what I understand it is a savings vehicle that gets matched by the government to help people go back to school, buy a house, or start a small business.

http://gwbweb.wustl.edu/csd/asset/idas.htm
<Click Here for I.D.A information>


I am looking forward to getting some feedback on how this works, I like the idea of the government matching your deposits.

[gavinmccallister]

I don't know why the link isn't showing up, for copyright issues I included the link rather then copy & pasting, now the link isn't showing up???

[Broken Arrow]

The link is working for me... unless you meant something else.

[tinapbeana]

it's showing up now

[poundwise]

It is not as simple as 'government matching.'

"Match dollars for IDAs come from many different places, such as government agencies, private companies, churches, or local charities." (This quotation and all those that follow are from the CFED IDA Fact Sheet)

It is a time-limited vehicle:

"An IDA program can be as short as one year or as long as five years from beginning to end."

And for specific purposes:

Usually to "buy a house, pay for education, or start a small business," though there are some exceptions.

Bottom-line, however, is that an IDA is more-or-less a work of charity for low-income households with very specific guidelines determining who is eligible:

"Most IDA programs specify a maximum household income level for IDA applicants. Maximum income levels are most often a percentage of the federal poverty guidelines (usually between 100% and 200%)"

"Some IDA programs also look at the household assets (such as a car, home, savings, etc.) in addition to household income when determining IDA eligibility. If you own assets valued at more than $5,000, you may not qualify for an IDA with these programs."

"Debt from credit cards and loans makes it difficult to save. You might not qualify for an IDA if you have a lot of debt or a bad credit history."

[Joan.of.the.Arch]

I had never heard of IDAs. The article said that in one IDA the average contribution was $19 a month and that goal was met only 6 months out of 12. Yet the average cost to the organization per participant per month was $70, at startup. It said expenses decline over time, but no numbers were given. Giving a 100% or 200% match on deposits is very generous!

The only thing I'm aware of in my area that is remotely similar is the "forgivable loans" that are occasionally availabe, administered through the city or the federally designated block grant neighborhood. They are usually about $2000 and can only be used for structurally or building & health code necessary repairs and maintenance such as roof replacement, plumbing or electricity repairs. You have to be a low income home owner and must live in the house for the next ten years. If you do, the "loan" is forgiven. If you sell or move out, you must repay, at what rates I don't know. There are very few of these loans available, and they are not available all years, I think. Sometimes they are available only within a certain targetted block within the neighborhood organization's coverage.

I've seen how expensive it is to bulldoze a dilapidated house (I think it was $15,000!) at public expense, so when my city can get some of these marginal houses fixed up, we as a city are coming out ahead: Stabilizing the neighborhood, saving material resources, not offering up yet another abandoned building to the crack dealers or arsonists. My neighborhood is actually quite a nice but humble neighborhood. A lot of people's grandmas and grandpas live here on small incomes. Not so many people with kids anymore. It is tidy, neat, and people do the best they can to keep it that way. I think of some of the other stuff our government spends $2000 on and I know I'd put forgiveable home maintenance loans ahead of a lot of that other stuff.

[Broken Arrow]

The first time I've heard of IDAs was on a radio documentary on NPR.

What I got out of it was that it was an expensive program and has been met with limited success. However, for those who:

A) Qualify
B) Can find the program
C) Are driven to save and really improve their finances

...the program has made quite a difference. In two of the families that NPR interviewed, both have gone from below the poverty line (and not knowing where they will get basic necessities for their children) to being able to have a car for a job and even a roof over their head. Nothing fancy or pretty, but at least they have it, and both have sung praises for the program.