CT Assets For Independence 
Individual Development Account Project

What are Individual Development Accounts?

An Individual Development Account is a financial and economic development tool designed help low-income families to save and accumulate financial assets - purchase of a first home, capitalize a business, or paying for post-secondary education.

CT AFI IDA Demonstration Project Abstract

The Connecticut Department of Labor (CT DOL) co-administers this Assets for Independence Demonstration Project with the Connecticut Association for Community Action (CAFCA). Total project funding consists of a $400,000 Federal AFI grant and $400,000 of non-Federal contributions. CT DOL is the grantee. CAFCA is the lead agency of a consortium that consists of several non-profit, incorporated Community Action Agencies. Consortium members are: Community Action Agency of New Haven Inc. (CAANH); Community Renewal Team Inc. (CRT); New Opportunities Inc.; and Thames Valley Council for Community Action Inc. (TVCCA). CTE, Inc. provides staff training, technical assistance, and data processing services. The Connecticut Treasurer's Office provides consultation and advocacy for Federal and State-funded IDA programs.

The project serves several geographic areas of Connecticut. CRT serves greater Hartford and Middletown. CAANH serves greater New Haven and Danbury. New Opportunities serves greater Waterbury, Naugatuck and Meriden. TVCCA serves greater Norwich, New London, and Groton. The target population consists of: TANF Assistance Recipients; low-income residents of Empowerment Zones, Enterprise Communities, and Public Housing; and people whose adjusted household annual gross income is at or below 200% of the Federal Poverty Guidelines.

A total of 170 IDAs are projected over 5 years. The match ratio of Federal and non-Federal dollars to the account holder’s savings dollar is 2:1. The number of IDAs per operator is as follows: CAANH, 47; CRT, 48; New Opportunities, 38; TVCCA, 37. Qualified Expense types are distributed as follows: 73 for first home purchase; 56 for post-secondary education, 41 for business capitalization.

Fleet Bank partners with CAFCA for the Central Reserve Fund. Local Reserve Fund partners (which also hold IDAs) are: Savings Bank of New Haven, First Union National Bank, Webster Bank, and Fleet Bank. Fleet Banks also holds IDAs for local programs.

Account holders receive economic literacy training, qualified expense-specific training and services, case management, counseling and crisis intervention to enhance their achievement of self-sufficiency through asset accumulation. Cooperating partners for account holder supports include the Connecticut Department of Social Services, Connecticut Department of Higher Education, Connecticut Housing Finance Authority, and Consumer Credit Counseling Service of Southern New England.

Links to info on IDAs, Enterprise Development, and other Asset-building Anti-Poverty Strategies:

Assets For Independence IDA Program -- Office of Community Services, DHHS-ACF

Association for Enterprise Opportunity

Corporation for Enterprise Development

IDA Network

National Endowment for Financial Education

National Federation of Community Development Credit Unions

CAFCA and it's twelve member Community Action Agencies met in November with staff from the Connecticut Housing Finance Authority (CHFA) in Middletown. CHFA presented information on all of the

different home ownership programs that are targeted for low and moderate- income people and CAFCA's members described all of the financial education programs they operate such as financial literacy, budgeting, and the Individual Development Account matching savings plans that can be used for the purchase of a first home. What came out of the meeting was a commitment to form a partnership focused on increasing home ownership and addressing the problem of affordable housing.

CAFCA President Paul Puzzo and CHFA's Judy Walters.