By Christine Henry, Executive Director of WECO, Sep 2009

Editor's Note: This article from our partner Chris Henry at WECO (www.wecofund.com) describes an Individual Development Accounts (IDA) program. While the state program succeeded, then was cut, WECO's local IDA program continues. It seems a very sensible and successful way to support working poor. [more]

WECO's day to day work is based on the core value that low and moderate income individuals should be able to acquire assets just like those in higher income brackets. Our job is to provide tools and support to those who want to become financially stable, and to pass that value on to their children.

One of our programs matches the savings that participants accumulate towards a personal goal. For the last two years we have managed an Individual Development Accounts (IDA) program to help low income families purchase a first time home. Through funding from the Ohio Department of Job and Family Services, participants took financial education and homeownership classes, and saved regularly to reach a goal of $750. Upon completion, they received a 3:1 match to the $750, for a total of $3000, to be used towards the purchase of a house anywhere in Ohio. Through the education they learned about credit scores, bank accounts, credit card fees, interest rates, homeownership, and other financial issues critical to financial stability. The match provided the incentive and the last few dollars needed to complete the purchase.

Studies reveal that two years after a purchase using an IDA, 99% of the participants still own their homes. In addition, of those who entered the program receiving public benefits, more than half no longer needed such assistance. Just the fact of owning a home also made them more likely to vote, be involved in their children's schools, and participate in community activities.

In the 20 months the Statewide IDA Program was active, 218 families purchased homes for the first time. The average sale price was $95,000, and the majority of buyers were strong, working single moms. The homebuyer education and money management classes, and the support from the WECO staff helped each participant make an intelligent, life changing decision. We were also able to ensure quality deals, as each house had to pass an inspection, have insurance, and 30-year standard mortgage. Not only was the program an antidote to the foreclosure crisis, it was a key contributor to rebuilding the housing market.

Many people worked hard on this program. The staff at WECO went over and above to ensure the success of this program. In addition, we received help from partner agencies around the state: Phebe Foundation, Allen Metro Housing Authority, Hocking Metro Housing Authority, Greater Linden Development Corporation, Homes on the Hill, Toledo Community Development Corporation, and Youngstown State University/Buy in to Youngstown. We are also grateful to our banking partners: KeyBank, National City (now part of PNC), US Bank, and Superior Credit Union.

Unfortunately, just as it was hitting its stride, the program ended on June 30. While we worked hard to save the program, it was not to be. Nearly 200 people around the state who had taken classes and were saving were caught in the pipeline. While we were able to transfer some to our local IDA program, there is a long waiting list of people eager to save, educate themselves, and participate in the match program.

Long waiting list - that's the challenge. While we feel good about the 218 families that now own a home for the first time, we want to help many more. We know IDAs work. The only thing keeping us from providing more of them is the need for match dollars. As we move forward we will continue to work hard to secure the funding needed to sustain the IDA program. You can help. Please consider a donation to this or any of our worthy programs to show your commitment to expanding opportunities for low-income families to build assets.

Call Carrie Rosenfelt, Director of Development at (216) 458-0250 or carrie@wecofund.com or visit our online donation page at www.wecofund.com and click the Support button!