Louisiana Asset Building Initiative

1
Louisiana Asset Building Initiative

• Individual Development Accounts (IDAs) are
  dedicated savings accounts that allow low-income
  workers to save earnings and acquire assets as a
  way out of poverty. Louisiana Asset Building
  Initiative will provide participants assistance
  in purchasing a home for the first time. IDAs
  have proven to help move low-income workers out
  of poverty. It is the only program of its kind
  whose success is dependent on the sacrifice and
  saving of participants, thereby ensuring their
  long-term success as productive citizens.

2
What are IDAs?

• Individual Development Accounts (IDAs) are match
  savings accounts designed to assist working
  low-income families acquire an asset. Southern
  Universitys IDA program is designed to assist
  low income families in purchasing a home for the
  first time. IDAs are based on the belief that
  asset building is the key to gaining economic
  self-sufficiency. IDAs are not government
  hand-outs. IDAs provide a great means of helping
  low-income families who are willing to help
  themselves. Asset ownership provides economic,
  financial and personal benefits to working
  low-income families. Some by-products of IDAs
  include a sense of accomplishments, pride and
  security.

Work
Education


Savings
Home Ownership !

3
How Our IDA Program Works

• Applicants must be determined eligible to
  participate in the program.
• Eligible applicants attend orientation sessions.
• Applicants complete Savings Plan Agreement, opens
  saving account and begin monthly deposits of 25
  per month/75 quarterly (saving accounts are only
  opened at approved participating financial
  institutions).
• Applicant must attend financial education classes
  and asset specific training classes.
• Applicant receives case management support from
  staff coaching, counseling and tracking
  progress.
• Throughout the training portion of the program,
  IDA clients are required to make consistent
  deposits to reach the maximum matched savings
  goal of 1,000. Once the client is ready to
  acquire their asset, their savings are matched at
  a ratio of up to 41.
• Once all program requirements are met and savings
  plan is achieved, participant is ready to receive
  match funds to purchase asset.

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Eligibility Requirements

• Clients adjusted gross income for the household
  will be at or below 200 of the federal poverty
  level.
• Clients must have some source of earned income.
• - Money wages and salaries before
  any deductions.
• - Self-employed or business income
  receipts.
• Clients must be employed.
• - Government assistance and/or
  supplemental income are not allowable
  financial resources for the IDA savings accounts.
• Participant must have at least one dependent
  child.
• Participants must not have owned a home within
  the past three years (homeownership component
  only)
• - Exceptions for special situation
  e.g. displaced homeowners, will be reviewed on a
  case by case basis.
• Participants must not have net worth (assets
  minus debts) exceeding 10,000.00 dollars.
• - Excluding the value of the primary
  vehicle.
• - Exception to the net worth limit
  (such as for persons receiving Federal natural
  disaster assistance, insurance payments, etc.)
  may be granted on a case by case basis.

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Income Eligibility GuidelinesMaximum Income by
Household Size(200 - Federal Poverty Rate)

• Household Size of
• 2
• 3
• 4
• 5
• 6
• 7
• 8
• each additional
• person, add

• 2006 2007 2008 2009
• 26,400 27,380 28,000 29,140
• 33,200 34,340 35,200 36,620
• 40,000 41,300 42,400 44,100
• 46,800 48,260 49,600 51,580
• 53,600 55,220 56,800 59,060
• 60,400 62,180 64,000 66,540
• 66,800 69,140 71,200 74,020
• 6,800 6,800 7,200 7,480

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Program Requirements

• Applicants should submit prior years tax
  information, form 4506-T and W-2s along with two
  recent pay stubs and employment verification form
  for all employed household members.
• Applicant should be able and willing to attend
  financial education and asset-specific training
  courses.
• Applicant should also be able to track
  individual/household expenses, and establish a
  reasonable spending plan, which will include
  saving 25.00, (or 75 quarterly) of their
  monthly earned income.
• Applicant should follow the programs guidelines
  as specified in the Participant Agreement.
• Each participant should be able to complete the
  program and obtain their asset within the stated
  program timeline.

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How to Get Started

• Step 1 Complete the application.
• Step 2 Submit prudent information (i.e. W2s,
  2-check stubs, form 4506- T, employment
  verification form, social security card, drivers
  license and prior year tax returns).
• Step 3 Acquire a Credit Report
• Step 4 With the assistance of clients case
  manager, client must complete a spending plan
  and budget.
• Step 5 Client must open a savings account at a
  designated financial institution and continue
  to save at lease 25 monthly /or 75 quarterly
  until savings goal is met.
• Step 6 Client must begin financial literacy
  classes and work on credit repair issues if
  applicable.
• Step 7 Client must begin home buyers education
  classes.
• Step 8 Client is now ready to secure desired
  asset.
• Step 9. Client purchase asset (home, education,
  or micro-enterprise).

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Success Stories

• Lynell Dixon
• Agency - Mid City Redevelopment Alliance,
  Inc. Lender - LS Inc. dba SB Hardie Financial
  Services Area Purchased- Baton Rouge, LA
• Tracey Jackson
•  Agency - LA DOTD (Federal Credit Union)Lender
  - LA DOTD (Federal Credit Union)Area Purchased-
  Baton Rouge, LA
• Jonathan Bushnell
• Agency -Lutricia Cobb Real EstateLender - JP
  Morgan Chase BankArea Purchased- Lake Charles,
  LA
• Chastity Rosette
• Agency - LADOTD Federal Credit UnionLender -
  The BankArea Purchased - Lake Charles , LA

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Quick Facts2008-2009

• Approximately 1300 residents applied for the IDA
  program.
• 750 individuals completed financial literacy.
• 750 individuals completed homebuyers education.
• 200 individuals purchased a home using IDA funds.
• 700 IDA Accounts have been opened since the
  program begin.

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Contact

• Center for Social Research
• Southern University and AM College
• Post Office Box 9503
• 208A Rodney Higgins Hall
• Baton Rouge, LA 70813
• Voice 225.771.5454 or 225.771-5402
• Fax [phone]
• Email mary_e_joseph_at_subr.edu