Fostering low-income homeownership through individual development accounts: A Longitudinal, randomized experiment

For low-income families, homeownership represents an important strategy for promoting long-term social and economic development. Individual Development Account (IDA) programs facilitate saving toward assets such as a home through matching, financial education, and case management. Using longitudinal experimental data from the American Dream Demonstration, this study examines the impact of IDA participation on homeownership rates and on clearing old debts. Low-income participants were interviewed after 18 months (Wave 2) and after program completion at 48 months (Wave 3). Logistic regression results indicate that among those who were renters at baseline, IDA participation significantly increases the clearing of old debts at Wave 2 and homeownership rates at Wave 3. IDA participants with cleared debt activity had the highest probability of becoming homeowners at Wave 3 (32 percent), while those who were not IDA participants and did not have such activity had only a 9.6 percent probability.