Individual Development Accounts (also known as IDAs) are matched savings accounts that some first-time home buyers can use to put together the down payment for a home they are saving to buy. In the Hartford area, there are several IDA programs operated by organizations that are members of the Hartford Asset Building Collaborative (HABC). Co-opportunity, Human Resources Agency of New Britain, Mutual Housing of Greater Hartford, the Urban League of Greater Hartford, and the Village for Families and Children offer IDA programs. IDAs are especially designed to meet the needs of working families with limited incomes. HABC IDAs are for residents of Hartford and surrounding communities and New Britain. There are other IDA programs serving residents of almost all large cities and towns in Connecticut.

Here’s how they work:*
Savers agree to save up to $2,000.00 in earned income in 2 to 3 years on average. After completing all program requirements, their $2,000.00 will be matched 2:1. This means that the organization running the program will add $4,000.00 to the amount a first-time home buyer has saved to put into a down payment.

Program requirements include:
1. Completing all seven sessions of a personal finance money management class.
2. Meeting monthly with a financial counselor to talk about budgeting, credit, and other financial challenges that arise.
3. Making regular savings deposits each month as agreed.
4. Taking the necessary steps to improve credit and show good money management habits.
5. Completing an approved Homebuyer Education course.

Here’s who is eligible:
To be eligible applicants must be able to show that they have regular earned income from full-time or part-time employment. IDA program counselors look at household income when deciding whom they can admit. Income guidelines depend on household sizes. A family of four, for example, can earn up to $40,000 and be eligible. A single person with income up to $19,600 is also eligible.

Counselors also look at what applicants already own and what they owe when they apply. There is a rule, for instance, that eligible households cannot have more than $10,000 in net worth. Net worth is what is left when you subtract what you owe (debts) from what you own (savings and investments). One car is permitted and is not considered part of net worth. In order to use an IDA to purchase a home, it must be a saver’s first home in order to count.
 
Other things to know:
The shortest amount of time a saver can take part in an IDA program is six months. The longest amount of time depends on when a saver enrolls in the program. It will never be much more than five years. Usually the time available is between three and four years. Frequently savers reach their $2,000.00 savings goals in two to three years.

Housing counselors working with IDA programs help savers through the whole process of home buying—from preparing to buy to finding professional help (real estate agents, mortgage brokers, appraisers, lawyers, etc.). They help savers go through the closing on a first home. Finally, once home buyers have moved in, counselors remain available to help with any matters that arise—such as maintaining the home, finding and hiring contractors, and dealing with family financial issues.

Timothy Cole, Ph.D., is the Director of Development and Community Relations at Co-opportunity, Inc. in Hartford. Since 2001 he has been a pioneer in introducing Individual Development Accounts in greater Hartford. For more information, he can be reached at 860-236-3617 ext. 112 or timothyc@co-opportunity.org.

How to find out more:
Hartford-area residents interested in IDAs can call any of the people listed here:

Co-opportunity, Inc.
20–28 Sargeant Street
Hartford
Call Maria Rivera,
860-236-3617 ext. 105

Human Resources Agency
of New Britain
180 Clinton Street
New Britain
Call Dora Whitehouse,
860-225-1084

Mutual Housing Association of Greater Hartford
95 Niles Street
Hartford
Call Marlyn Miranda,
860-547-1205

The Urban League of Greater Hartford
140 Woodland Street
Hartford
Call Evelyn Branch,
860-527-0147 ext. 124

The Village Center for Community Life
331 Wethersfield Avenue
Hartford
Call David McGhee,
860-297-0598 ext. 795

* There are actually several different models for IDAs. Here we are talking about one particular model that is supported by the US federal government under the Assets for Independence Act (AFIA).