Last Updated: September 22, 2009

Connecticut Individual Development Account Initiative

• Best Practices

• Connecticut IDA Regulations

• Consumer Credit Information

• Contact Us

• Credits for Contributions

• FAQs For Participants

• Financial Education

• Foreclosure Prevention And Mortgage Modification (PDF, 68KB)

• Frequently Asked Questions

• Funding Opportunities

• History of IDAs

• Housing Trust Fund IDA Regulations

• IDA Brochures

• IDA Program Certification

• IDA Programs in CT

• Mission, Goals and Objectives

• News and Events

• Partners

• Policies and Procedures Manual

• Resources

• Success Stories

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Individual Development Accounts (IDAs) are matched savings accounts in which low-income individuals and families accumulate funds that can be used for one of several allowable assets. IDAs are the centerpiece of a new asset-building, anti-poverty strategy that recognizes that low-income families escape poverty through asset acquisition, not simply through income.

IDAs are a relatively new idea that is gaining popularity in the country and in Connecticut. IDAs were first proposed in 1993, and IDA Programs are proving successful in helping low-income families accumulate assets that will provide security for them and something of lasting value that they can pass on to their children. IDA Programs require the partnership of community-based organizations, financial institutions, and the IDA Account Holder. Government agencies can channel funds, institute policies and serve in other capacities to facilitate IDA programs.

The Connecticut IDA Initiative began with the Treasurer's Task Force on IDAs. The statewide Task Force included representatives from community-based organizations, business groups, financial institutions and state government agencies. The Treasurer's Task Force on IDAs developed a Strategic Plan for IDA opportunities in Connecticut and released its Report and Recommendations in January 2000. For more information or to request the Task Force on IDAs Report and Recommendations, visit www.state.ct.us/ott/idatask.htm. 

By June 2000 the State Legislature authorized the Connecticut IDA Initiative through Public Act 00-192. The Department of Labor (DOL) is the administrator of the Connecticut IDA Initiative. DOL performs the following functions in its role as administrator:

1. Establishes an IDA Reserve Fund to hold state funds and private sector contributions for the administration of the Connecticut IDA Initiative, and for certified State IDA programs.

2. Certifies IDA programs in Connecticut regardless of funding source provided that such programs meet certain criteria based on the State law and recognized best practices.

3. Funds Certified State IDA Programs through a Request For Proposals process.

4. Evaluates the Connecticut IDA Initiative and provides annual reports.

5. Establishes an IDA Clearinghouse to provide information about funding opportunities, best practices, and technical assistance to Community-Based Organizations (CBOs) that operate or seek to establish Certified State IDA Programs.


Savings that IDA Program participants deposit in their IDAs are matched at various rates for every dollar saved. Depending on the program, allowable asset purchases may include:

• A First Home, defined as the IDA Account Holder’s primary residence, the cost of which shall not exceed 120% of the average area purchase price of a home, and may include, but not be limited to, the costs of acquiring, constructing or reconstructing a residence, including any usual or reasonable settlement, financing or other closing costs.
  
• Small Business Capitalization, defined as the participation in or development of a new or existing entrepreneurial activity for which a business plan has been developed with the direct or indirect assistance of the community-based organization operating the IDA Program.
  
• Job Training or Education, defined as all costs which are necessary for the enrollment and successful completion of a program of education or job training, including but not limited to tuition, fees, books, supplies and equipment.
  
• Automobile, the purchase of which is necessary for obtaining or maintaining employment.
  
• First month’s rent and security deposit for an apartment, defined as the purchase of a lease deposit on the Account Holder’s primary residence.

Status of the Connecticut IDA Initiative

Who Can Operate IDA Programs under the Connecticut IDA Initiative?

Only Community-Based Organizations (CBOs) are eligible to operate Certified State IDA Programs. CBOs are defined as agencies having IRS code 501(c)(3) tax-exempt status. 


Program Eligibility for the Connecticut IDA Initiative

People with earned income or qualified disabilities whose household Adjusted Gross Income is at or below 80% of the area median income for their town of residence are eligible. Programs are asked to use best efforts to ensure that 30% of the program slots are reserved for people with earned income or qualified disabilities whose Adjusted Gross Income is equal to or less than 200% of the federal poverty level.


Approved Savings Goals

• Costs of Job Training or Education
• Buying a home
• Small business start-up
• Purchase of an automobile to obtain or maintain employment
• A lease deposit on a primary residence

Match Rates

For all Certified State IDA Programs, Account Holders' savings from earnings must be matched at a rate of at least 1:1. Funding received from the State IDA Reserve Fund has a maximum match rate of $2 for every $1 deposited by an Account Holder. 


Program Requirements

In addition to matching IDA savings, programs must provide financial education before accounts are opened, and asset-specific training throughout a person's participation in the program. Other supports such as crisis intervention and re-employment services also will be available as needed. People who participate enter Savings Plan Agreements with the CBO, and may have up to 5 years to reach savings goals.


Credits for Contributions

Private sector contributions to the State IDA Reserve Fund merit Human Capital Investment Credits (HCIC) for contributors in Connecticut. Monetary and other types of contributions by financial institutions are eligible for Federal Community Reinvestment Act credits. 

Contact Lisa Arends at DOL at lisa.arends@ct.gov for information regarding contributions to the State IDA Reserve Fund.

The asset-building strategy of IDAs creates hope, jobs and enterprises, builds families, communities and economies, and develops assets and enduring escapes from poverty. IDAs bring to low-income families the benefits of savings, investments and assets to which higher income segments of our society have access.

IDAs are an important community development tool that appeals to all sides of the political spectrum. They provide for a unique collaboration between financial institutions and Community-Based Organizations. By combining the matched savings accounts with Financial Education classes, Asset-Specific Training, and Case Management, IDA Programs help participants change their behavior around saving and spending, show them how to set goals and plan for the future, and bring them into the financial mainstream.



"Income may feed people's stomachs, but assets change their heads." 

Michael Sherraden,
Assets and the Poor: A New American Welfare Policy, 1991