Policy Guide: Assets for Independence Act

The Assets for Independence Act (AFIA) is a grant program sponsored by the Department of Health and Human Services (HHS) Administration for Children and Families program in its Office of Community Services. AFIA makes five-year grants to community-based nonprofits, government agencies, and various other eligible organizations, for the purpose of helping low-income families build assets through savings accounts and gain financial management skills.

Groups that receive AFIA funds assist low-income residents by developing a special-purpose savings account known as an Individual Development Account (IDA) . The agency matches funds that the low-income participant deposits into the IDA, which promotes savings and helps the participant build more wealth. The funds in the IDA may be used to acquire a first home, capitalize a small business, or enroll in postsecondary education or training. Additionally, AFIA projects must provide financial education on such topics as bank account and credit card management, credit counseling, and tax credits.

A state-by-state list of AFI grant recipients can be found here: http://www.acf.hhs.gov/programs/ocs/news/assets-for-independence-grant-awards-in-2012

Eligible organizations include:

  • Nonprofit organizations, including faith-based and community groups
  • State, local, and tribal government agencies applying jointly with a nonprofit
  • Community development financial institutions that partner with a community-based antipoverty group
  • Low-income credit unions that partner with a community-based antipoverty group
  • Consortia of organizations and agencies that target multiple service areas

As of 2007, the annual appropriation for the AFIA program was $24.4 million. Currently the program supports over 200 programs.

Between 1999 and 2007, according to a report by the Office of Community Services that administers the program, participants opened 52,531 IDAs (43,932 in regular AFI projects and 8,599 with AFI support in the special state AFI projects), depositing $45.3 million of earned income. Participants used $70.4 million to purchase long-term economic assets. To accomplish these purchases, participants drew down on their own IDA savings ($22.3 million) and used matching funds ($48.1 million). The matching funds were comprised of federal AFI grant funds ($23.7 million) and non-federal funds ($24.4 million). In sum, the program in its first eight years supported 7,024 new homeowners, provided capital for 4,865 businesses, and helped 5,687 people finance postsecondary education or training.

Community development organizations can obtain AFI grants to help community members achieve these gains. Indeed, many community development corporations and community development financial institutions administer AFIA grants in their areas where they work. AFIA, however, has stringent matching requirements. For additional information, community organizations interested in applying for an AFIA grant can contact:

Assets for Independence
Office of Community Services
(202) 401-4626

afiprogram@acf.hhs.gov

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