Savings program helps Boulder County working poor buy a home, get a degree or start a business: Personal Investment Enterprise program provides 4-to-1 matching grants

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Daily Camera
By: Amy Bounds
March 12, 2010

Adrienne Lauer tried out and interviewed twice before scoring a pastry chef job at Boulder's acclaimed Frasca Food and Wine.

But that job meant moving from Denver to Boulder to avoid wasting hours commuting. A single mom, all she could find to rent in her price range was a one-bedroom apartment. She slept on the couch for almost two years so her son could have the room.

"I really like my job," the 31-year-old said. "I knew I wanted to stay here."

 

Looking into buying her first home, she took a homeownership class, saw a pamphlet about a savings program and decided to give it a try. She saved $750 in eight months, then received a grant of $3,000, giving her $3,750 for a down payment.

 

The Personal Investment Enterprise program provides a 4-to-1 matching grant to help the working poor buy a home, pay for education or start a small business. Boulder County's Community Action Programs manages the program.

 

Participants save at least $25 a month, until they've saved $750, in an individual development account. The program provides a matching grant of $3,000. Participants can save the money in as little as six months or take as long as two-and-a-half years.

 

"It gives people the incentive to save," said Janet Heimer, Community Action Programs director. "If you are someone who has been low-income for a long time, you are so busy dealing with crisis in your life that you can't think about the future. This gives them a future vision to work toward."

 

About 70 people are enrolled in the program now, with another 20 spots available. The program also offers 25 spots for those interested in providing bilingual early-childhood education. New applicants are accepted year-round.

 

Lauer worked with Thistle Community Housing to find her two-bedroom condo near Valmont Road and 47th Street, which she bought in July. She said the toughest part wasn't saving, but finding a loan officer who understood low-income housing rules.

 

Though there are downsides to homeownership, like covering the cost of repairs and dealing with an HOA, she said, she likes the stability and didn't want her eighth-grade son to have to move again before graduating from high school.

 

"It was a good decision, and the right decision for us," she said.

 

The Boulder County program, which started in 2002, is based on the Individual Development Account concept -- save a small amount, take financial literacy classes and get rewarded with matching money that you don't have to repay.

 

The idea is that meeting a family's emergency needs for food and shelter isn't enough. To escape poverty, researchers say, people need assets -- education, savings, better jobs, a house they own.

 

In the last decade, according to the Corp. for Enterprise Development, more than 85,000 Individual Development Accounts have been opened in programs at more than 1,100 sites around the country.

 

Boulder County is one of three places in Colorado offering Individual Development Accounts. The other two programs are in Denver and Colorado Springs.

 

In Boulder County, 84 people have successfully completed the program. Not including people who moved out of the state or left the program because of an emergency, the Boulder County success rate is 70 percent.

 

"The main reason people leave the program is they can't save the money," said program coordinator Nino Gallo. "They lose a job or have major health problems."

 

The program is funded through a mix of federal money, local government contributions and private money that's mainly from grants. Foothills United Way handles the finances and fundraising.

 

"So many people here work so hard and are not able to make any headway with economic sustainability," said Foothills United Way President Barbara Pingrey. "What we want to do is give people a hand up."

 

Organizers said the requirement that all participants take a class on financial literacy to learn how to manage their money is key to the program's success.

 

Potential homeowners also take a class through Boulder County that includes a credit assessment, a primer on financing options and information on closings.

 

Those looking to start or expand a business take a class that requires them to develop a solid business plan, while those who want to further their education meet with an academic counselor.

 

The federal money comes with strict income guidelines, limiting the annual income of a family of four to $44,100 or less. Raising private money allows for higher income limits, opening the program to more people.

 

Carmen Giardiello, a single mother whose adult disabled daughter lives with her, used the program to move from a rental in Boulder to a house in Longmont.

 

She rented in Boulder for 15 years before trying the savings program. She bought her Longmont townhouse in October, six months after starting to save.

 

"I never imagined I could buy a house," she said. "They teach you all the steps. I'm very happy."

 

When the program started in 2002, most participants went for a house. But education and starting a business have become more popular as it's become more difficult to qualify for financing.

 

Since the economy crashed, program organizers said they're also signing up more entrepreneurs who are unemployed or want to supplement their family income.

 

Sally Raleigh, who lives in Longmont, initially joined the program because she and her husband wanted to buy a house. But they ended up making an offer on the house they were renting, so she switched to the small business program.

 

"I didn't know the first thing about starting a business," said Raleigh, who's primarily worked as a homemaker. "They really helped me with a business plan and strategies and things I never would have known to do on my own."

 

Her idea for Pixies and Pirates, a children's tea and birthday party business, came from all of the parties she's thrown for her own children, who are 2, 4 and 7.

 

"So many of my friends told me I should do that for a living," she said. "It's what I feel like I'm good at. It's a creative release."

 

She recently completed the Personal Investment Enterprise program, launched her Web site and used the money to buy costumes and supplies.

 

"I can't say enough about how great the program has been," she said. "It's such a great place if you're starting at ground zero."

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This page contains a single entry by Ernest Roberts published on March 15, 2010 4:50 PM.

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