**Express IDAs: Take a Fast Ride to Success**

Typically, an Individual Development Account (IDA) allows a participant
to get financial education, save over two or more years, and have the
savings matched over that time. Try compressing all of that into just
one year. Foundation Communities, a Texas-based affordable housing and
asset-building agency, first tried it only because a funder, Providian
Financial, required it. Further, the only asset purchase could be a
home, frequently the most difficult IDA goal for low-income families.

To meet the challenge, Foundation Communities
\[[www.foundationcommunities.org](http://www.foundationcommunities.org/)\]
staff designed the Express IDA. It may not work for everyone, but some
people are becoming homeowners through this fast-track IDA process. The
Express IDA has also turned out to be one way to address a unique AFI
challenge: expending match money before the AFI grant closes out.

**The Express IDA**

The Express IDA is fast, but it doesn't skimp or cut corners. It still
includes financial education and more than the usual dose of home-buyer
training and counseling. It requires participants to save for at least
six months, a minimum of \$35 a month, and reach a minimum total of
\$420 to receive a \$4 to \$1 match---netting \$2,100 (\$420 + \$420 x
4). Those reaching the minimum target before the end of the program must
continue saving, though the additional amount is not matched. Karen
Lyons, IDA coordinator for Foundation Communities, says, "We want them
to get into the pattern of saving for at least a year."

Enrollees begin with a tax workshop in January and end with their asset
purchase in December. And there is no recovery if a saver goes off the
rails for some reason. Participants must exit and cannot return if they
miss just one of the five Money Management classes, five homeownership
seminars or five additional units focused on the home-buying process. On
the Express track, participants complete financial education and asset
training in three to four months. Compare that to Foundation
Communities' standard IDA model: financial training completed within the
first six months and asset training over the next year or two. On the
Express track, both are covered in three to four months. Express
graduates have up to six months to purchase a home.

One result of this fast schedule and the strict enforcement is a
slightly higher attrition compared to the regular AFI track, although
two-thirds of the 30 enrollees in the first year completed the Express
IDA, according to Lyons.

*[Express Versus Standard: How the Participants Differ]{.underline}*

There are some differences between Express participants and those on the
traditional AFI track at Foundation Communities. Both programs recruit
tenants of Foundation Communities' 1,000 units of below-market rentals:
80 percent of these residents meet AFI income eligibility guidelines.
But, says Lyons, "The majority of Express clients have a longer history
of employment and more professional positions. Some are teachers or
state civil service employees." Their credit scores are generally higher
and reflect this stability. Express applicants must begin with a credit
score of 620, whereas the standard track has no fixed threshold.

The demanding pace of learning and saving means that Lyons interviews
Express applicants more closely, though there is no formal selection
process. "You want to be sure they can do it, and are committed to it.";
Lyons acknowledges, however, "Sometimes people surprise you. You think
they can't do it, and they can." One Express group was comprised
exclusively of single mothers. Express participants do not differ in the
amount of case management, in Lyons's judgment; but, like everything
else, it is packed into the shorter time frame.

If an Express participant cannot complete the course for some reason,
there are no options for a different asset purchase. The short time
frame requires this strictness. That is different than for regular AFI
participants who, for example, may change their purchase goal if unable
to reduce debt or repair their credit satisfactorily. Lyons estimates
that about 25 percent of the regular AFI enrollees change their goals,
usually after completing the financial education component, but
sometimes after completing the basic home ownership class. In that
class, Lyons emphasizes the distance participants may have to go to
qualify for a mortgage. For example, exercises let participants
calculate how much "more house" they might be able to handle with
additional improvements in their credit picture. Further, Lyons notes,
"Many don't have the employment stability that lenders look for." As of
January 2005, asset purchases under Foundation Communities' two previous
AFI awards were split nearly evenly between homes, on the one hand, and
education and business on the other, with the number choosing education
increasing rapidly.

**Express Is Not for Everyone**

Foundation Communities has been using the Express IDA for three years
now, even though the original funder ultimately did not require full
expenditure of its grants within one year. So, if the Express IDA works
so well, why not offer it as a track for all Foundation Communities IDA
enrollees? After serious consideration, staff decided to keep the two
tracks separate. The abbreviated time line of the Express IDA would work
against successful completion for many participants enrolled under the
three-year AFI model. Lyons says, "So many have credit issues and can
benefit from working on credit and building savings over a longer
period." In addition, the traditional IDA model permits saving up to
\$600 a year for three years, with a \$2 to \$1 match, for a total of
\$5,400, compared to the Express total of \$2,100. There are also
staffing limitations to the Express IDA program. Finally, having
consistency in the program design is generally easier for candidates and
participants to understand and for staff to explain.

.

**Express as a Close-out Tool**

In addition to benefits to participants, the Express IDA has also been
useful as an AFI close-out tool for Foundation Communities. In 2004,
they were in an unexpected position: they had used all 100 of the
planned account slots on their 1999 award, but graduating participants
had not exhausted the entire match pool of the 1999 AFI award. Remaining
funds had to be spent as quickly as possible, while still adhering to
AFI guidelines. Lyons turned to the now-proven Express IDA to allow
additional accountholders to secure all the benefits of the IDA:
financial education, asset training, and asset purchase. Most of these
transfers to the Express, she says, are using the education option, a
new feature they can now choose.

Despite these challenges, Lyons believes that Express graduates will
demonstrate as much asset retention and ability to build on their asset
as graduates of the more traditional AFI model. Other AFI grantees might
consider whether a similar track might work for them.