Buying a Home: Individual Development Accounts (IDAs)

An Individual Development Account, or IDA, is a special savings program designed to help the working poor save money to buy a house, fund their college educations, or start a new business.  IDA programs are created for the express purpose of helping the working poor accumulate assets, which has been shown as the major way to build wealth in the United States.

IDAs must be set up by community groups, such as non-profits, who are required to provide financial counseling to IDA participants.  Participants must attend about eight hours of financial management training and learn how to develop a budget, save money, and practice sound spending habits.

The IDA program must be managed by a local bank.  The government and other foundations match 2 for 1 whatever funds the families manage to save.  For example, a family who saves $25 per month, will receive $75 that month after the government matches their savings 2 for 1.  If the family saved $25 per month for one year, it would receive a total of  $900 plus interest. 

Groups who sponsor IDAs typically limit participation to those who are gainfully employed, but who earn less than the national poverty level.  This amount will vary from location to location since the cost of living varies.

In addition, there might be a cap on the amount of money one can accumulate in an IDA.  For example, a community IDA program might limit participants to saving no more than $2,000, which with the 2 for 1 matching fund, would allow them to collect $6,000 through the IDA program for a down payment on a home.

There are currently about 500 organizations in the United States who sponsor IDAs.  More than 20,000 IDAs have been opened.  To find an IDA in your area, visit the web site

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