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Louisiana Asset Building Initiative

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  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 University’s 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 4:1. • Once all program requirements are met and savings plan is achieved, participant is ready to receive match funds to purchase asset.

  4. 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.

  5. 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

  6. Program Requirements • Applicants should submit prior year’s tax information, form 4506-T and W-2’s 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 program’s 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.

  7. How to Get Started • Step 1: Complete the application. • Step 2: Submit prudent information (i.e. W2’s, 2-check stubs, form 4506- T, employment verification form, social security card, driver’s license and prior year tax returns). • Step 3: Acquire a Credit Report • Step 4: With the assistance of client’s 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).

  8. Success Stories • Lynell Dixon Agency - Mid City Redevelopment Alliance, Inc. Lender - L&S 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

  9. 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.

  10. Center for Social Research Southern University and A&M College Post Office Box 9503 208A Rodney Higgins Hall Baton Rouge, LA 70813 Voice: 225.771.5454 or 225.771-5402 Fax: 225.771.4716 Email: mary_e_joseph@subr.edu Contact