Ill. Admin. Code tit. 89, § 112.156 - Assets for Independence Program
a) The Assets for Independence (AFI) Program
is a federal grant program that enables agencies to implement and demonstrate
an asset-based approach for giving low-income families help out of poverty. The
AFI Program allows eligible low-income Illinois citizens currently residing in
Illinois, subject to the availability of State and federal funds and
authorization from DHS, to open and maintain an Individual Development Account
(IDA) at a federally insured financial institution.
b) IDAs are matched savings accounts designed
to help low-income and low-wealth families accumulate savings to purchase a
first home, start a small business or continue their education. IDAs promote
savings and enable participants to acquire a lasting asset after saving for a
few years. The IDA program is open to all people within the State who meet the
federal and State account holder eligibility guidelines and rules for income
and assets.
c) An IDA is a trust
created or organized exclusively for the purpose of paying the qualified
expenses of an eligible individual, or enabling the eligible individual to make
an emergency withdrawal, but only if the written governing instrument creating
the trust contains the following requirements:
1) No contribution will be accepted unless
the contribution is in cash (including electronic transfers) or by
check.
2) The trustee is a
federally insured financial institution or a State insured financial
institution, if no federally insured financial institution is
available.
3) The assets of the
trust will be invested in accordance with the direction of the eligible
individual after consultation with DHS providing deposits for the
individual.
4) The assets of the
trust will not be commingled with other property except in a common trust fund
or common investment fund.
5)
Except as provided in subsection (c)(6) of this Section, any amount in the
trust that is attributable to a deposit provided under section 410 of the
Assets for Independence Act (AFIA) (
PL
105-285 ) (
42
USC 604 note) may be paid or distributed out
of the trust only for the purpose of paying the qualified expenses of the
eligible individual.
6) Any balance
in the trust on the day after the date on which the individual for whose
benefit the trust is established dies shall be distributed within 30 days after
that date as directed by that individual to another IDA established for the
benefit of an eligible individual.
d) For purposes of subsection (c) of this
Section, a custodial account shall be treated as a trust if the assets of the
custodial account are held by a bank (as defined in section 408(n) of the
Internal Revenue Code of 1986 (
26 USC
408(n) ) or another person
who demonstrates, to the satisfaction of the Secretary of Health and Human
Services (HHS), that the manner in which that person will administer the
custodial account will be consistent with the requirements of AFIA and if the
custodial account would, except for the fact that it is not a trust, constitute
an IDA described in subsection (c) of this Section. In the case of a custodial
account treated as a trust by reason of the preceding sentence, the custodian
of that custodial account shall be treated as the trustee of the
account.
e) An individual may make
deposits to his or her IDA only from earned income as defined in section
911(d)(2) of the Internal Revenue Code of 1986.
f) The moneys in an IDA and match moneys from
the AFI fund shall be used solely for qualified expenses, defined under section
404(8) of the AFIA, as follows:
1)
Post-secondary education expenses, which means the following:
A) Tuition and fees required for the
enrollment or attendance of a student at an eligible educational
institution.
B) Fees, books,
supplies, and equipment required for courses of instruction at an eligible
educational institution.
C) An
"eligible educational institution" means the following institutions classified
by the Illinois Board of Higher Education:
i)
An Illinois Public College or University; or
ii) An Illinois Community College.
2) First Home Purchase
A) Qualified acquisition costs with respect
to a principal residence for a qualified first-time homebuyer if paid from an
IDA directly to the persons to whom the amounts are due.
i) "Principal residence" means a main
residence, the qualified acquisition costs of which do not exceed 120 percent
of the average area purchase price applicable to the residence.
ii) "Qualified acquisition costs" means the
costs of acquiring, constructing, or reconstructing a residence. The term
includes any usual or reasonable settlement, financing, or other closing
costs.
iii) "Qualified first-time
homebuyer" means an individual participating in the project involved (and, if
married, the individual's spouse) who has no present ownership interest in a
principal residence during the three-year period ending on the date of
acquisition of the principal residence to which this subsection (f)(2)
applies.
iv) "Date of acquisition"
means the date on which a binding contract to acquire, construct, or
reconstruct the principal residence to which this subsection (f)(2) applies is
entered into.
B) Program
participants will be eligible to withdraw money from an IDA for a first-time
home purchase if they have participated in the program for at least 6
months.
3) Business
capitalization expenses
A) "Qualified business
capitalization expenses" means qualified expenditures for the capitalization of
a qualified business pursuant to a qualified plan.
B) "Qualified expenditures" means
expenditures included in a qualified plan, including capital, plant, equipment,
working capital, and inventory expenses.
C) "Qualified business" means any business
that does not contravene any law or public policy (as determined by the
Secretary of HHS).
D) "Qualified
plan" means a business plan, or a plan to use a business asset purchased, that:
i) Is approved by a financial institution, a
microenterprise development organization, or a nonprofit loan fund having
demonstrated fiduciary integrity;
ii) Includes a description of services or
goods to be sold, a marketing plan, and projected financial statements;
and
iii) May require the eligible
individual to obtain the assistance of an experienced entrepreneurial
adviser.
4)
Transfers to IDAs of family members are amounts paid from an IDA directly into
another such account established for the benefit of an eligible individual who
is:
A) the individual's spouse; or
B) any dependent of the individual with
respect to whom the individual is allowed a deduction under section 151 of the
Internal Revenue Code of 1986.
g) Moneys in an IDA that are used for the
qualified expenses listed in subsection (f) of this Section shall be matched
from the AFI Fund created as a fund to be held by the Secretary of DHS. Program
participants will receive match funds of 1:1 for homeownership accounts.
Program participants will receive match funds up to 3:1 for educational
accounts, pursuant to funding availability. The AFI Fund is a source of funding
from HHS and the Illinois Department of Human Services specifically designated
to fund Individual Development Account Initiatives pursuant to provisions of
AFIA.
h) Not more than $2,000 of
moneys from the AFI Fund shall be provided to any one individual.
i) Not more than $4,000 of moneys from the
AFI Fund shall be provided to any one household.
j) Persons eligible to open an IDA and to
receive AFI Fund moneys are individuals currently residing in Illinois who are:
1) Able to demonstrate, via the most recent
federal tax return, that they are currently eligible for assistance under the
TANF program; or
2) Able to
demonstrate:
A) via the most recent federal
tax return, that the adjusted gross income of their household in the calendar
year preceding the determination of eligibility was equal to or less than 200%
of the poverty line, as determined by the Federal Office of Management and
Budget or the earned income credit, described in section 32 of the Internal
Revenue Code of 1986 (taking into account the size of the household);
and
B) that the net worth of their
household, as of the end of the calendar year preceding the determination of
eligibility, does not exceed $10,000, as determined by AFIA section 408(2)(B)
and (C).
k)
Moneys in an IDA, including accrued interest and matching deposits, shall be
disregarded for the purpose of determining the eligibility and benefit level
for TANF in the case of the individual establishing the IDA with respect to any
period during which the individual maintains or makes contributions into the
IDA (see Section
112.151
).
l) To be considered fully
enrolled in the IDA program, an individual must have:
1) Completed a program application;
2) Submitted a copy of the previous year's
federal tax return;
3) Submitted a
copy of a credit report issued to him or her during the previous three
months;
4) Participated in the IDA
orientation;
5) Completed and
signed a participant account agreement; and
6) Opened an IDA account at an authorized
financial institution.
m) DHS reserves the right to deny applicants
that state that their only asset goal is home ownership, if those applicants do
not meet the following eligibility thresholds:
1) Earned income must exceed 100% of the
federal poverty line as determined by the federal Office of Management and
Budget; and
2) Credit scores must
exceed a FICO (Fair Isaac and Company) score of 515.
n) Those individuals who do not meet the
credit or income threshold requirement for the IDA homeownership initiative
will be provided with the following alternatives:
1) Participation in the IDA microenterprise
or continuing education initiative; or
2) Participation in a credit-counseling
program.
o) IDA program
participants shall complete basic financial management training to satisfy the
federal requirement for this training. Financial education partners can provide
either basic financial education or asset specific education to program
participants. This training can be offered online, via teleconference, via
self-study options, via partner agencies or through direct classroom training.
DHS will create a menu of financial education providers that account holders
may use to fulfill their financial education requirements. This education will
be provided free of charge to program participants.
p) IDAs shall only be opened with the
permission of DHS. Accounts may be opened via the Internet, with DHS assistance
or via a telephone call to a customer representative. DHS staff will provide
those individuals who complete orientation with permission to open an account
by calling and utilizing a Personal Identification Number.
q) Emergency Withdrawals
1) Withdrawals for non-authorized expenses
may not be taken from IDAs unless approved, in writing, by a representative
from DHS for emergency purposes only. An emergency withdrawal is a withdrawal
by an eligible individual that:
A) is a
withdrawal of only those funds, or a portion of those funds, deposited by the
individual in the IDA of the individual;
B) is permitted by a qualified entity on a
case-by-case basis; and
C) is made
for:
i) expenses for medical care, or
necessary to obtain medical care, for the individual or a spouse or dependent
of the individual;
ii) payments
necessary to prevent the eviction of the individual from the residence of the
individual or foreclosure on the mortgage for the principal residence of the
individual; or
iii) payments
necessary to enable the individual to meet necessary living expenses following
loss of employment.
2) No other participant funds may be
available for solving this emergency need. An individual shall reimburse an IDA
for any funds withdrawn from the account for an emergency withdrawal, not later
than 12 months after the date of the withdrawal. Participants that request more
than one emergency withdrawal from their IDA in a calendar year will be removed
from the IDA program. These participants will forfeit their right to
participate in this program in the future. Program participants that make
unauthorized withdrawals from their IDAs will be removed from the IDA program
and will forfeit their right to participate in this program in the future.
Under no circumstances, and at no time, shall an IDA holder lose the ability to
withdraw moneys from his or her IDA.
r) DHS will set up a sweep account to manage
electronic withdrawals from participant checking and savings accounts to IDAs.
These accounts will carry no balance and will serve solely as a facilitator of
the electronic funds transfer process.
s) IDAs will be set up to draft program
participant's primary bank accounts on a date agreed upon by the account
holder. This process will ensure timely deposits to accounts and decrease the
need for social service intervention with account holders. All accounts will
utilize this feature to gather participant deposits.
t) Program participants will be eligible to
withdraw moneys from an IDA for eligible post-secondary education expenses and
business capitalization expenses if they have participated in the program for
six months and have fulfilled the financial education requirements listed in
subsection (o) of this Section. Program participants will be eligible to
withdraw money from an IDA for a first-time home purchase if they have
participated in the program for 6 months and have fulfilled the financial
education requirements listed in subsection (o) of this Section. Program
participants may then complete an approved Withdrawal Request Form and submit
it to the DHS Project Director. Once approved by the Project Director, the
Director will submit a request that can be used for making a purchase. The
request for a transfer of funds from the AFI Fund must be signed by two
representatives of DHS. One of these representatives must be the DHS Chief
Financial Officer.
u) All vendors
will receive payment from a participant's IDA and the corresponding matching
funds owed from the match funds pool. Match funds will be sent to the vendor
from whom the participant is purchasing the asset. DHS will be responsible for
keeping written records of funds transferred and assets purchased.
v) Program participants will need to submit a
separate request for each qualified asset purchase. The provisions of
subsection (t) of this Section shall apply when paying asset vendors for
multiple qualified asset purchases. Purchase requests will be processed within
five working days after receipt of a completed purchase requisition. A complete
purchase requisition shall consist of a participant Withdrawal Request Form and
a purchase order with a vendor clearly identified as the authorized
payee.
w) An IDA holder shall have
a 36-month period, beginning on the date DHS authorizes the holder to open the
IDA, within which to make a qualified purchase.
Notes
Amended at 32 Ill. Reg. 17167, effective October 20, 2008
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.