A helpful IDA

How an IDA works:

>> Every dollar that a participant saves is matched either 2-to-1 or 3-to-1 up to a $5,000 match. To get the match, the participant's contribution must be kept in the IDA for at least six month. IDA recipients also are required to enroll in training courses.

>> Funds are kept in special no-fee, interest-bearing savings accounts at Bank of Hawaii and American Savings Bank.

>> When the participant is ready -- and eligible -- to use the IDA, the nonprofit service provider would make out the matching portion of the amount to the appropriate party without the participant ever touching the money.


The Hawaii IDA Fund is an initiative of Aloha United Way, Alu Like Inc., American Savings Bank, Bank of Hawaii, City and County of Honolulu, Goodwill Industries of Hawaii Inc., Hawaii Alliance for Community-Based Economic Development, Parents And Children Together, and the state.

>> To donate: Make checks payable to "Hawaii IDA Fund" and send them to: PACT, 1485 Linapuni St., Suite 105, Honolulu, HI 96819. A return address is required for contributors to receive their state tax credit.

>> Call: 211

>> Web site: (click on IDA)

Marla Cruz always felt like she was packing her bags.

It was hard to call anyplace home after moving from place to place each time rent prices went up. She lived in six dwellings -- some apartments, some houses -- during a 10-year period.

Then she read in the newspaper about an Individual Development Account program that low-income families can use to help purchase a first home, capitalize a small business or fund higher education.

Today, she's the co-owner of a three-bedroom, two-bath home in Ewa Villages and finally feels settled in her life. She and partner Laura Tavares live there with five children.

"I'm very grateful because now we have our own home and I have something that I can leave behind to my children," said Cruz, who bought the home for $154,000 in December 2000. "I always know there's that equity in the house, so in case of financial difficulties, I have something to fall back on."

IDAs, which have been compared with 401(k)s, are matched savings accounts. Nonprofits Alu Like Inc., Parents And Children Together and several small groups have used $1.2 million in federal grants to assist about 700 families in the last five years. But the grant money is running out.

The Asset Building Initiative of Hawaii, which is comprised of those groups and others, is seeking to raise $1 million with the help of state legislation that was passed in 1999.

That legislation, which went into effect in 2000 and expires at the end of this year, allows a 50 percent state tax credit for contributions to IDA programs. It also allows donors to take a charitable contribution deduction on federal returns.

"IDAs help people built assets," said Glen Hayase, director of the Asset Building Initiative of Hawaii. "And assets, in turn, help families become more financially stable. This trickles down into the larger communities. The communities become stronger, and that reduces poverty and dependence on welfare."

Hawaii has the second-lowest homeownership rate in the nation, behind only New York, according to the state Asset Development Report Card published by the Corporation for Enterprise Development. The same report found that nearly one-fifth of Hawaii's households have zero or negative net worth.

IDAs are meant to assist families in asset development, said Hayase, who is hoping the $1 million in matching funds can help 400 to 500 low-income families in Hawaii. The matching contribution is meant to give those families a jump-start toward their objective, and designated nonprofits will begin providing IDAs to qualified applicants once the Hawaii IDA Fund receives $100,000 in donations.

Hawaii residents are eligible for IDAs if their household income is 80 percent or less of the median area income. Each county has their own threshold, but in Honolulu those numbers are: one-person household, $36,800; two, $42,050; three, $47,300; four, $52,550; five, $56,750; six, $60,950; seven, $65,150; and eight, $69,400.

When Cruz qualified, it was as a three-person household because of her two children and her annual income of $31,200 a year. She had been paying $775 a month for her rental in Kaneohe.

Cruz saved $1,000 that was matched 3-for-1 by an additional $3,000 from the IDA program.

She also had help from the City and County of Honolulu in the form of a second-mortgage, down-payment $30,000 loan at a flat rate of 1 percent that is deferred for 15 years. She also qualified to buy an "affordable home" in the Ewa Villages development.

"It's made a tremendous difference," said Cruz, who researches land titles for the state Department of Transportation.

"I was brought up in a house and only lived in an apartment for a short time. Having my own children, I wanted them to have the same benefits I had -- having their own yard, swing set and a safe place to play where they don't always have to go to the park to play. I wanted them to be friends with the neighborhood children and having those neighborhood ties, which makes a great difference."


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