She knows better than anyone the benefits of a savings plan: Because of budget cuts, Family Savings Account to stop taking new applicants in June
By Karen L. Miller
May 2, 2010
May 2--FREE MONEY -- that's a deal that's hard to refuse.
And starting in June, it will be a deal even harder to come by.
The federally funded, state-administered Family Savings Account, which matches dollar for dollar savings from eligible families that save at least $40 a month, will cease to accept new applicants June 30.
The once-per-lifetime, per-state program was cut from the state budget last summer.
The applicants have three years to reach a maximum of $2,000 deposited in a National Penn Bank savings account to qualify for a FSA match of $2,000.
The money is matched after the deposits are made. If a family can't make the deposits for three months in a row, their money is refunded, but the matching money goes back to the program to help other qualifi ed families.
Jasmine G. Pelaez, FSA coordinator through Berks Community Action Program, herself was twice the benefi ciary of the program before she went to work for the local FSA at 518 Washington St. about a year ago.
When Pelaez lived in New York, where it was called Individual Development Account, she applied to the program to save for the purchase of a home.
Then she visited Reading, bought an Our City Reading home, found the program here and used it to buy a car.
In her work, Pelaez said one of the most difficult tasks is to convince potential applicants of the 10-year-old program that the money is really free.
"They say, 'There's no such thing as free money,'" Pelaez said. "But I say: 'I'm living proof. There's my car out there.'"
Pelaez also pointed out a new graduate of the program, a woman who completed all of the requirements to get the complete match.
"We do have several clients who are financially challenged," Pelaez said. "Yalissa LaRosa is a single parent, working, going to school and saving for the program. She just bought a home in Shillington in July.
"We do a budget with them to make sure they can afford a home with mortgage, taxes and utilities."
For Sharon McMichael, senior vice president, community reinvestment, at National Penn Bank, who handles the FSA accounts, said: "National Penn Bank has supported this program in Berks County since its inception here and has nearly 140 active participant accounts.
"For some of the people whom I've come in contact with through this program, the additional matched assistance it off ers is the difference between buying a house and not buying a house.
"I closed on a mortgage for a person who was eligible for the FSA program. I recommended that this particular homebuyer apply for the assistance and use it for home repairs."
Pelaez can still take on clients through the end of June. "I have a few slots left," she said. "A lot of people need reliable cars. Some have humdingers or sour lemons. And they need cars to work to get to work. "Some clients car pool with three diff erent people to get to work. They work third shift and some coworkers leave earlier some night so they miss their rides." The program's end won't mean that Pelaez' days at FSA are over. The contracts with existing clients continue and the program may be renewed in another budget.