By DUANE M. ELLING
To some families, the goal of owning a home may seem ordinary, even expected. For many others, particularly low-income households, it can be an elusive dream.
Raven Simmons knows that dream well. The Flint resident has worked all her adult life, frequently holding multiple jobs to support herself and her son. But homeownership always seemed beyond her reach.
That began to change in June 2005 when Simmons opened an Individual Development Account (IDA) through the Genesee Area Investment Network$ (GAIN$).
This innovative savings program -- launched in March 2005 and modeled after similar programs around the country -- is operated by the Flint/Genesee IDA Collaborative. It provides low-income, low-wealth families with a $3 match (up to $3,000 total) for every $1 they deposit in a program-managed bank account. When a series of agreed upon goals are reached, the account holder may use the accumulated funds to secure a specific asset, such as buying a home, starting a small business or continuing his or her education.
Employment is a prerequisite for GAIN$ participants, who also receive training in such areas as banking, financial planning and money management. Each is designed to help families acquire the assets and skills necessary to move out of poverty and into long-term economic stability.
The program’s success -- 80 IDAs were opened within the first year -- is mirrored in the collaborative’s own efforts.
This partnership of nine area nonprofit organizations conducts program-related outreach, case management and training, and brings together needed financial and technical resources. A program advisory committee, made up of representatives from area banks, businesses and other institutions, offers additional guidance and support.
Funding collaborations have also been instrumental. The Charles Stewart Mott and Ruth Mott foundations, the Community Foundation of Greater Flint and the United Way of Genesee County (UWGC) have each provided support. Additional funding has come from the U.S. Department of Health and Human Services.
“The focus of the IDA program is financial savings as a pathway to self-sufficiency,” said Diana Kelly, community investment manager at UWGC. “That shared vision for Flint area families was also key to bringing the various funding sources to the table.”
Creating such community-wide support is crucial to the IDA model, says Edward Hoort, executive director of Legal Services of Eastern Michigan. The Flint-based nonprofit law firm offers free civil and legal assistance to low-income families throughout mid-Michigan. The agency also provides financial and legal oversight of GAIN$.
“Whether its banks helping manage the accounts, agencies helping families develop savings plans or any of the other organizations involved, each is key to making sure participants have a good chance at success,” said Hoort.
Keeping the program relevant to account holders’ unique needs and concerns is an important focus of the collaborative. For example, the partnering organizations understand that reliable transportation can be crucial to helping low-income workers find and maintain employment. As a result, local account holders may use their savings to purchase a vehicle, an asset not always available through federally funded IDA programs.
The collaborative also seeks creative solutions to help program participants. Prospective homeowners may be linked to additional down payment assistance programs and low interest loans, helping them obtain safe, quality housing with a reasonable mortgage. Some might purchase and restore local abandoned and tax-reverted properties through the Genesee County Land Bank, an innovative land rehabilitation program launched with the support of Mott. And other families may work directly with the collaborative’s own housing partners, such as Genesee County Habitat for Humanity, to realize their dreams of a new home.
The program’s various outreach, service and case management services are managed and coordinated by Metro Housing Partnership (MHP). This Flint organization also works with local non-profits to expand and enhance affordable housing opportunities in Flint and Genesee County.
Ravi Yalamanchi, CEO of MHP, notes that helping low-income families create a new future is one of the many benefits of IDA programs.
“As low-income families build assets, they also stabilize neighborhoods and schools, and build a feeling of community ownership,” Yalamanchi said. “That strength will help move the Flint area forward.”
Simmons and her son also feel that sense of community engagement and hope for the future. Their new home, purchased in November 2005 with the help of money saved via their IDA, offers a sense of personal place, as well as space.
“The IDA Program did more than help me become a homeowner,” said Simmons. “It also helped me realize that I can reach whatever goals I set for myself. And this is just the beginning.”
Additional Resources
- Click here to learn more about the Michigan IDA Partnership. The partnership, launched in 2000 with the help of Mott, seeks to bring IDA opportunities to families throughout Michigan.