What are IDAs

What is an IDA program?

Individual Development Accounts (IDAs) are special matched savings accounts for low to moderate-income families.  Each dollar a participant saves is matched by public and/ -or private sources.  The program’s ultimate goal is to provide funds for an asset-building purpose such as purchasing a home, attending post-secondary school, or expanding or starting a business.  Other purposes may include buying a car, saving for retirement or making home repairs.

 How does it work?

In Texas, there are 15 IDA programs.  These programs are self-governed entities with their own localized initiatives and practices.  However, their structure is universal in that all participants maintain a savings account in a financial institution with these funds matched at varying rates (i.e., 1:1, 2:1, 4:1) by private (e.g., banks, United Way, etc.-) and/or public (local and federal government) sources while attending required financial literacy and asset-specific classes.  The goal for each participant is the purchasing of a defined individual asset.  Matching rates, duration of assistance and monthly deposit amounts are also program-specific.  While there is no collective timeframe for the state’s recently formed IDA groups, program participation could potentially range from six months to five years.

 Where are the IDA programs in Texas?

Existing or emerging IDA programs are currently spread across Abilene, Austin, Beaumont, El Paso, Houston, the Rio Grande Valley, San Antonio, and Waco.

 How do families and individuals apply?

The application process varies from organization to organization, but most participants find out about IDA programs through community outreach efforts specific to their locality.

 Who is eligible?

Criteria differ from program to program, but participants are typically lower to moderate-income people.

What makes IDA programs so effective?

In addition to saving with a financial institution where their funds are matched over time, IDA program participants attend mandatory financial literacy classes, which reinforce money management skills along with long-term financial planning and home purchasing techniques.  These classes give participants the tools they need to better control their budgets and make important decisions about their own money.

Who is RAISE Texas and what are its goals?

RAISE Texas was created in 2002 as a statewide network primarily involved in facilitating and advancing the progress of Individual Development Account (IDA) programs throughout Texas.  In 2005 the network expanded its activities and members to include organizations and institutions engaged in asset-building activities that included efforts to increase savings, financial education, free tax preparation, credit repair, and other related wealth-building products, programs, and policies. In December 2007 the network was officially incorporated as RAISE Texas to enable us to support local and statewide programs and develop campaigns to expand asset-building opportunities for all Texans.

 For more information on IDAs and asset building programs, please contact Woody at:  Woody Widrow, RAISE Texas, Project Director, 506 W. 14th St., Suite A, Austin, TX 78701, (512) 477-4431 ext. 129 or by email at woody@covenantcapital.org.