WASHINGTON -- The U.S. Department of Health and Human Services has delivered a grant of $415,000 to the National Credit Union Foundation, which the NCUF will, in turn, distribute among credit unions to fund their individual development accounts.
IDAs are accounts set aside for education, home ownership or to start a business. Deposits from account holders are generally matched with funds from other sources.
The U.S. Department of Health and Human Services became the fourth federal agency to approve a grant to NCUF in the past five years. HHS' Office of Community Service awarded the grant to promote its Assets for Independence program.
NCUF will use these federal funds to assist members of three pilot credit unions with expertise in IDAs: El Paso Affordable Housing Credit Union Service Organization, headquartered in El Paso, Texas; Option 1 Credit Union, headquartered in East Lansing, Mich.; and the Syracuse Cooperative Federal Credit Union, headquartered in Syracuse, N.Y.
The credit unions will provide volunteer income tax assistance and advise qualified low-income families to apply for Earned Income Tax Credits. Those families will be encouraged to use their tax refunds to open savings accounts. Low-income members who commit to financial education and saving for a down payment will be selected for IDAs.
Members with IDAs will receive $2 in matching funds for every $1 they save. Half of the matching funds will come through NCUF, which has established a reserve account for the credit unions to draw down as IDA holders reach their savings goals. The other half of the matching funds will be raised by the credit unions.
During NCUF's application process to HHS, the credit unions sought commitments from partners in the credit union system, local government and private foundations. The five-year program is contingent upon the credit unions building sustaining funds.
"This grant from HHS is an opportunity for NCUF and the pilot credit unions to test a holistic model approach to helping low-income households save for homeownership through IDAs," explained NCUF Executive Director Steve Delfin. "We're encouraged that another federal agency recognizes our Foundation as an intermediary for grants that will help credit unions serve people of modest means." --email@example.com