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April 2002
8
Credit Union Builds Savers' Assets
BY MARK WINEKA
SALISBURY POST
Many Salisburians saving money for their first home have become familiar
with a new acronym: IDA.
It stands for Individual Development Accounts -- savings accounts set up
to provide funds for purchasing a first home, adding education or job
training or helping to start a small business.
The N.C. Department of Labor fostered the program, overseen in Raleigh by
former state Rep. Charlotte Gardner of Rowan County.
Here, the Rowan-Iredell Area Credit Union sponsors IDAs and partners
closely with the Salisbury Community Development Corp. Both agencies have
offices at the new city Business Center at 1400 W. Bank St.
Jill Burch, micro-enterprise coordinator for the credit union,
administers the IDA program and says it's all about asset building for
people with low or moderate incomes.
Participants gain motivation, seeing they can save money, and because of
those savings, take a step toward achieving a significant goal, Burch says.
They become more assertive about improving their lives, she adds.
For every dollar a person saves, the credit union matches that dollar up
to $1,000.
By the end of the program, the participant has $2,000 in the IDA, which
can be used as a downpayment on a house, capitalization for a new business
or education fund.
The participant must save at least $25 a month.
Typically, matching funds for the IDAs come from private foundations and
the public sector. Burch spends much of her time with the program raising
funds. So far, news of the program has spread mostly by word of mouth.
In its second year, the credit union's IDA program has 31 participants in
the two counties.
"I'm elated about how many people are participating," Burch says.
All but one of the people enrolled -- Burch herself is the exception --
are saving money toward down payment on a home. (Burch wants to start her
own business.)
As part of their commitment, the participants must attend mandatory
"economic literacy and training" classes -- workshops in money management,
home ownership, business management or whatever other training is related to
what they're saving for.
The program also offers one-on-one counseling and reviews a person's
credit, whether it needs to be established or cleaned up.
To be eligible for an IDA, the participant must be a member of the credit
union and his or her family income cannot exceed 80 percent of the median
income.
Eighty percent of the median income for a household of four is $48,300 a
year, for example. For a single person, it's $33,800.
Burch said participants include couples, singles and single mothers and
fathers. The Salisbury workshops are held at the Business Center and
conducted by the Salisbury Community Development Corporation.
The Community Development Corporation provides workshops for potential
homeowners in its own program, which requires at least a $750 down payment
from the individual buying a new Community Development Corporation home.
Lou G. Adkins, community development coordinator for the Community
Development Corp., says she encourages people in her program to open an IDA,
so they can benefit from the matching money. Of 23 people in the Community
Development program now, nine have IDAs.
"And we're doing all the training anyway," Adkins adds. "I think it's
excellent because it gets people in the habit of saving and having to do it
for 12 consecutive months."
The workshops offer six hours of instruction in money management, 10
hours in home ownership and up to six hours in home maintenance, including
landscaping.
Adkins used to be Community Development Corp. director in Lexington,
whose program was one of the first eight in the state to participate in the
IDA program.
"It has really caught on around the country," Adkins says. "North
Carolina is really one of the first states to offer matching funds."
Contact Mark Wineka at 704-797-4263, or
mwineka@salisburypost.com.
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