CAPITAL & ACCESS TO CAPITAL: (PART II) INDIVIDUAL DEVELOPMENT ACCOUNT (IDA)

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E’licia L. Chaverest, M.S.Program Manager and Marketing SpecialistSmall Farms Research Center

College of Agricultural, Life and Natural ScienceAlabama A&M University

What is IDA? (IDA) means Individual

Development Accounts Saving accounts that provide matching funds for farmers of low or moderate means.(state and regional initiative)

IDA PROGRAM The program is part of Assess for

Independence, a federal program administered by the Office of Community Services of the US. Department of Health & Human Services .

• United Way of Central Alabama serves as an administered for the IDA Program

HOW DOES THE IDA PROGRAM WORK?

Open an IDA (a no-fee saving account and make monthly deposits of at least $25 which will be matched 2 :1

•Qualifying individuals to save up to $2,000 for a total of $6,000.00 that used for the financial goals

INDIVIDUAL DEVELOPMENT ACCOUNTELIGIBLE FINANCIAL GOALS

• Start Or Expand A Business• Purchase A Home• Pay College Related Expense

YOU CHOOSE!

ENROLLMENT PROCESS1. Opening an Individual Development Account is

easy. • Once you complete the Application Form • Submit on-line

2. You will be contacted by an Individual Development Account representative to guide you through the process.

3. IDA Representatives will work closely with you1. Answer all of your questions 2. Help you learn financial responsibility 3. Watch your assets grow!

• Earned Income• Annual Adjusted gross income of less

than $44,700 for a family of four or an individual income of $21, 780

• No more than $10,000 in total net worth excluding an automobile and home

IDA BASIC QUALIFICATION

To be eligible for the IDA program, individuals must have:

• Earned income• Annual adjusted gross income of less

than $47,700 for a family of four or an individual income of $23,340.

• No more than $10,000 in total net worth excluding an automobile and home

BASIC ELIGIBILITY OF IDA PROGRAM

IDA Income Eligibility – Persons in Family and Adjusted Gross Income

1 Up to $23,340 2 Up to $31,460 3 Up to $39,580 4 Up to $47,700 5 Up to $55,820 6 Up to $63,940 7 Up to $71,060 8 Up to $80,180

For families with more than 8 persons, add $4,020 for each additional person.

BASIC ELIGIBILITY OF IDA PROGRAM (CONT.)

HOW TO GET STARTED?• Submit the IDA on-line application.

• Once submitted, a United Way representative will contact you and guide you through the process

• Once enrolled, begin making monthly deposits (minimum of $25 per month) into your IDA – a free savings account with no fees

• As your savings grow and are matched, you move closer to achieving your dreams

DONORS OF IDA PROGRAM

1.Regions Bank

2.BlueCross Blue Shield of Alabama

3.Alabama Power

4.EBSCO Industries Inc.’s

5.PUBLIX and Other in surrounding counties

IMPACT ON ALABAMA OF IDA PROGRAM

Since United Way began offering the IDA program in 2005 more than 950 individuals have enrolled in the program and acquired stabilizing assets valued at $14.5 million.

♦ 136 Families have purchased first time homes

♦ 110 Individuals have benefited from post secondary education or job skills training

♦ 43 Enterprising small businesses owners have opened a new business or expanded their operation

TO LEARN MORE ABOUT THE PROGRAM OR TO

APPLY Contact United Way of Central

Alabama to get started 1-888-421-1266 or check out the website www. uwca.org/ida

It’s Easy as 1-2-3

SUCCESS STORIESASSET: HOME

-IDA Participant: Anika Lanier -Date: 11/24/2009 -Value: $179,900 -Location: Jefferson County

Anika found out about the IDA program through NHSB. She wanted to purchase a home so she could provide a stable home for her children in a good location for schools. She really needed the matched savings to buy her home and after working with United Way she was able to move up from a small 2 bedroom apartment to her dream home.

ASSET: EDUCATION -IDA Participant: Paul Smith -Date: 04/28/2010 -IDA Funds: $4,226 -Location: University of Alabama at Birmingham

Even with a wife and three kids, Paul was able to save money for my education because the IDA program took away two-thirds of the cost. Paul says, “We are so grateful for this program for me to have been able to graduate from UAB with an Accounting degree and stay debt-free.”

REFERENCESUnited Way website. http://www.uwca.org/our-work/financial-stability/ida/

https://www.fdic.gov/bank/analytical/quarterly/2007_vol1/IDAs-and-banks.html