IDA Program Eligibility

The Saving for the American Dream IDA Program is open to individuals or families who meet the following criteria:

• They residence in the Los Angeles County service area and have at least 16 years of age.
• They have earned income, meaning they are employed, or self-employed and have a source of income through their work.
• Their household’s combined yearly income does not exceed 200 percent of Federal Poverty Guidelines as defined the table below based on family size: 

Table 2. 2007 HHS Poverty Guidelines

SOURCE: Federal Register, January 24, 2007

• Families who do not meet the above income limits may still qualify if they received or qualified to receive the Earned Income Tax Credit during the most recent tax season.
• In addition to the income tests, applicants’ net household worth as of the end of the preceding year does not exceed $10,000. (The $10,000 excludes primary dwelling unit and one motor vehicle).
• If the applicant is member of a household receiving TANF (or Calworks) benefits, this applicant can enroll into the IDA program regardless of his household income and asset limits, as long as some proof of income from employment is provided.

Frequently Asked Questions

What is an “IDA”?
IDAs, or Individual Development Accounts, are special matched savings accounts designed to help families and individuals of modest means establish a pattern of regular saving and, ultimately, purchase a “productive asset.”  A “productive asset” is something of value that is likely to return substantial long-term benefits to its owner-- benefits like security, stability and opportunities for more income.  Saving for the American Dream IDA Program participants may use their savings and match money towards the purchase of a home, small business or micro enterprise (both start-up, and expansion), or post secondary education (tuition and fees, books, supplies and equipment).

What is a “savings match?”
A “savings match” is a promise to supplement an IDA participant’s savings deposits at a specific rate; in other words, a 2:1 savings match means that for every dollar a participant saves, he or she will have another two dollars added to his or her total account balance!  At UWGLA, the match balance is kept in a separate control account but will be available for the participant use towards their asset purchases once they complete all the requirements of the program.

 
Why would anyone give away money like that?
Savings matches are not “giveaways.”  Participants earn savings matches by saving their own hard-earned dollars and taking other steps to prepare for the future, like attending personal finance and asset-specific workshops.  Savings match are only to be used towards asset purchases in the categories of homeownership, micro-enterprise start-up or expansion, or post-secondary education.  Furthermore, providing match dollars is a way to help hard working low-income families and individuals build a more stable and secure future.  Everyone benefits when more members of a community have the tools they need, the productive assets, to provide for themselves and their families.  This same thinking has been behind government initiatives like the Homestead Act of the nineteenth century and the GI Bill following World War II.  

 
Where does the match for the IDA’s come from?
Fifty percent of the match is provided by the federal government through the AFIA grants UWGLA applies for and receives.  The other 50 percent of the match is provided by various United Way donors that contribute to the “Creating Pathways Out of Poverty” campaign.  “Women Leaders” is a notable UWGLA donor group that has a strong commitment in contributing their time and efforts to this program.

 
Is there more to an IDA Program than just savings matches?
Absolutely!  Most people need more than just cash to become successful homeowners, business owners, or continuing students.  For this reason participants in the Saving for the American Dream IDA Program attend both personal finance and money management workshop series and a special asset-specific preparation program.  These workshops are designed to help participants acquire or polish the personal and financial skills that are essential for long-term success, such as long-range planning, household budgeting, credit repair and savvy consumer habits.

 
Who provides the financial literacy and asset-specific training?
The community organizations that UWGLA partners with to provide the IDA program are conducting these trainings on-site.  Some IDA organizations are using Financial Mainstream, a non-profit financial education consultant UWGLA has a contract with, to conduct their financial literacy classes.

 
Who is eligible to participate?
The Saving for the American Dream IDA Program is open to individuals or families who meet the following criteria:

• They residence in the Los Angeles County service area and have at least 16 years of age.
• They have earned income, meaning they are employed, or self-employed and have a source of income through their work.
• Their household’s combined yearly income does not exceed 200 percent of Federal Poverty Guidelines as defined the table below based on family size: 

Table 2. 2007 HHS Poverty Guidelines

SOURCE: Federal Register, January 24, 2007

• Families who do not meet the above income limits may still qualify if they received or qualified to receive the Earned Income Tax Credit during the most recent tax season.
• In addition to the income tests, applicants’ net household worth as of the end of the preceding year does not exceed $10,000. (The $10,000 excludes primary dwelling unit and one motor vehicle).
• If the applicant is member of a household receiving TANF (or Calworks) benefits, this applicant can enroll into the IDA program regardless of his household income and asset limits, as long as some proof of income from employment is provided.

What happens if my income goes up or if I get married, will I be disqualified from the program?
No, you will not be disqualified from the program if your income goes up or if your get married.  Participant eligibility is determined only at your time of enrollment in the beginning of the program.

• Make monthly savings deposits of at least $80 and up to $150 for homeownership; and $50 to $120 for small business or education IDAs. Occasional missed deposits are allowed under the program policies.
• Use the IDA to purchase a home, start/expand a small business, or spend on post-secondary and vocational education for themselves or their dependents.
• Save in the program for at least 10 consecutive months up to a maximum of 36 months depending on how much they save every month.
• Attend a personal finance and money management workshop series (minimum 10 hours)
• Participate in asset-specific ownership preparation training (minimum eight hours)
• Support one another through on-going peer support meetings

Where are savings deposited?
Saving for the American Dream has enlisted US Bank, Union Bank of California, and Citibank as financial institution partners.  Program participants establish special IDA savings accounts, jointly owned by United Way of Greater Los Angeles and individual participants, at one of these institutions.  IDA accounts will not be assessed any monthly service fees and will be insured by the FDIC, FSLIC or FCUIC for up to $100,000 per account.

Are withdrawals from the IDA savings accounts allowed?
Because IDAs are intended to help people purchase a home, withdrawals for non-asset uses are prohibited except in certain emergency situations.  Emergency situations include and are restricted to the following:

1. Expenses for medical care or necessary to obtain medical care for the participant or a  spouse or dependent of the participant.
2. Payments necessary to prevent eviction of the participant from, or foreclosure on the mortgage for, the principal resident of the participant.
3. Payments necessary to enable the participant to meet the necessary living expenses such as food, clothing, shelter, and utilities following loss of employment.

Such withdrawals would not include savings matches.  At any time, participants have the right to close their accounts, withdraw from the IDA program and receive all of their deposited savings and earned interest (excluding the savings match money).  Please note that for all withdrawals, participants must contact their IDA case manager and fill out the required forms prior to visiting any banks.  After receiving the completed withdrawal forms, UWGLA in turn will send over the appropriate documents for the participant take to the bank in order to make their requested withdrawal.

How do participants receive match funds?
Matched funds will be made available to participants when they are ready to purchase an asset.  At that time, a vendor check will be issued directly to the company, institution or individual furnishing all or a part of a participant’s asset goal.

Do I need to buy my asset in LA County?
We would like to encourage participants to invest their assets in the LA County, but we will consider funding asset acquisitions outside of the LA County service area, provided that the participant can demonstrate that the investment is in their best interest.

How can I apply to participate?
Anyone interested in finding out more about Saving for the American Dream IDA Program should attend one of the regularly scheduled orientation sessions.  Enrollment applications are distributed during orientations.  To find out the dates and locations of upcoming orientations, or to receive additional information or ask a specific question, call United Way of Greater Los Angeles at 213 808-6525 or 213 808-6519 or visit http://www.unitedwayla.org/IDA