Using individual development accounts to save for a home: Are there differences by race?

Pursuing home ownership may be an important strategy for long-term economic and social development of low-income and minority households. Analyzing data from the American Dream Demonstration (ADD), this study examines the performance among black and white participants of a matched saving program designed to use Individual Development Accounts (IDAs) to expand home ownership among low-income participants. Results show that both black and white participants are able to save but that black IDA participants save smaller amounts and less frequently. Findings also suggest that the relationship between institutional variables and savings differs by the race of IDA participants. Implications are discussed for design and implementation of programs aimed toward increasing savings and asset accumulation among low-income and minority households.