Funding Available to Build Economic Security for Low-Income Families and Individuals: The Assets for Independence Program

Posted on: January 28th, 2013 by Carrie Kissel

The Office of Community Services at the Department of Health and Human Services Administration for Children and Families is now accepting applications for funding for the Assets for Independence (AFI) program (http://www NULL.idaresources NULL.org/page?pageid=a047000000DegF5). The 2013 grant application deadlines are March 25 and May 24.

AFI projects help participants save earned income in matched savings accounts called Individual Development Accounts (IDAs) with the goal of helping participants to purchase a first home, capitalize a small business, or obtain postsecondary education or vocational training.   More than 350 organizations across the country (http://www NULL.idaresources NULL.org/afigrantees) currently offer IDA programs, including many in rural and small metro areas. AFI projects are structured so that they are carried out by local organizations or as a regional network project (http://www NULL.idaresources NULL.org/page?pageid=a047000000ApiTV) and work well as a complementary program to a range of other community development activities.

IDAs have been used as a tool for economic self-sufficiency in a number of communities for several years.  The rationale for IDAs lies in the proposition that income transfers have eased the hardship of the poor but have been less effective in enabling low-income families to become economically self-sufficient.  An alternative view that emerged in the early 1990s was that to promote economic advancement and self-sufficiency—as well as to encourage socially positive behaviors—policies should focus on asset accumulation, in combination with income support.

AFI itself has supported the establishment of IDA programs since 1999, and it has made over 400 grants to local organizations for their work.  As a result, over 60,000 individual participants have opened accounts.  Those participants have saved $45-million.  About 24,000 savers have already used their accounts to purchase assets, including homes, educational offerings, or to open small businesses.  About 80 percent of the AFI-assisted savers are women.

IDAs have been found to be effective ways of helping many different types of community betterment programs.  For example, a number of community development organizations have used IDAs to help low-income residents save money to buy homes, start businesses, or fund educational programs that expand their job skills or broaden their economic outlook.   This use of IDAs has helped some families stay in the communities they have long called home.  Effective IDA sponsors have included community action agencies, local or state governments, public housing authorities, community development corporations, Urban League chapters, United Ways, community development financial institutions (CDFIs), and others.

Tacoma Housing Authority Uses IDAs to Help Tenants Buy New Homes

In 2002, when the Tacoma Housing Authority kicked off its first IDA program, one of its main motivations was to help some of its low-income tenants become homeowners.  Moreover, it had a large number of tenants who were soon to lose their apartments in the redevelopment of the Salishan public housing community in Tacoma, and all would need new homes.

Salishan was a complex of over 850 apartments originally built for World War II workers and their families in east Tacoma.  But the site had become run down and dangerous by the time the Housing Authority won a $35-million HOPE VI grant from HUD to redevelop Salishan in 2000.  To accomplish the redevelopment—which will result in over 1,200 units of mixed income housing and other amenities by 2012 or so—every tenant had to be moved, at least temporarily.

Like each of the 600 HOPE VI projects nationwide, the new Salishan will include both sales and rental housing, all to accommodate a mix of incomes.  Every tenant will be allowed back, and one-quarter of the sales units will be specifically priced at a level affordable to tenants.

Of course, though, not every tenant can become a home owner.  But to increase the odds, the Tacoma Housing Authority started its IDA program.  It won a HUD Homeownership Support Services grant in 2002 to, among other activities, begin helping tenants become owners.  “It has been a long-term process of helping tenants to overcome barriers to solve their credit problems, get better jobs and otherwise achieve their goals of homeownership in the new project,” says authority director of community services Nancy Vignec.

The authority’s program has always emphasized bundling counseling and education with the matched savings.  It helps participants learn about budgeting, improving credit, financial literacy, and using mainstream financial institutions.  Part of the difficulty on this last issue, Vignec points out, is that no banks have had branches at Salishan.  The authority wants to attract a bank to its new retail center to be built at the site.

The authority’s intensive work with tenants has worked.  Over 40 program participants have bought homes and 36 more families are currently active in building their IDAs.  Some graduates have used their savings to buy within the new Salishan, and others bought homes elsewhere.  It has helped the savers that Tacoma housing prices did not experience either severe increases or decreases over the years, and one can find a decent home for less than $200,000—far less than in nearby Seattle.

The Tacoma authority has expanded its original HUD-funded program by successfully applying for an Assets for Independence grant and receiving funds from the state of Washington’s department of Commerce, Trade and Economic Development.

The state has been an important partner for the authority and IDAs in the area.  As Vignec says, “It has a holistic approach to improving the financial situation of residents over the long run.”  The state has supported the creation of an asset building coalition in the Tacoma area, bringing together a broad set of partners for the authority.  Vignec points out that her office doesn’t have to create programs when other organizations locally have already proven their expertise.  “We can get one of our partners to provide good credit counseling,” she says, “and we can work with our partners to expand VITA sites in the community, including one on authority property for our tenants to use.”

The authority is contemplating two new directions for its IDA work.  One is an expanded effort to help youth learn about budgeting and saving.  It has used some of its state funds for a small youth IDA component, working mostly with people aging out of foster care.  Second, it is helping some IDA participants use their money to buy educational assets, recognizing that people need new skills to find jobs in the current economy.

Still wondering if AFI is a good fit for your organization?  

Applications for AFI grants of up to $1 million are currently being accepted. Eligible applicants include:

  • Non-profit organizations,
  • Qualified state and local governments,
  • Low-income designated credit unions,
  • Community development financial institutions, and
  • Other community-based organizations.

Applicants must commit a non-Federal cash contribution of an amount equal to their Federal grant size at the time of application.

Check out this fact sheet (http://www NULL.idaresources NULL.org/page?pageid=a047000000DegF5) to see if the AFI program is right for you.  For more information about how your organization can get involved with AFI visit our website at idaresources.org (http://www NULL.idaresources NULL.org/), attend one of our prospective grantees webinars (http://idaresources NULL.org/page?pageid=a047000000IarHCAAZ), or contact the Assets for Independence Resource Center (info null@null idaresources NULL.org) for free information and technical assistance.

Contact Information

  • Assets for Independence Resource Center
  • Phone: 866-778-6037
  • Email: [email protected] (info null@null idaresources NULL.org)
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