Individual development account — Purpose

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  1. (a) Individual development accounts may be used for any of the following qualified purposes:

    1. (1) Qualified acquisition costs with respect to a qualified principal residence for a qualified first-time home buyer or the costs of major repairs or improvements to a qualified principal residence, if paid directly to the persons to whom the amounts are due;

    2. (2) Amounts paid directly to a business capitalization account which is established in a federally insured financial institution and is restricted to use solely for qualified business capitalization expenses consistent with a qualified plan;

    3. (3) Postsecondary educational expenses paid directly to an eligible educational institution;

    4. (4) Amounts paid directly to an individual retirement account or education individual retirement account established pursuant to federal law in the name of the individual development account holder or an immediate family member thereof;

    5. (5) Qualified acquisition costs with respect to the purchase of an automobile or costs of repair of an automobile, if paid directly to a licensed automobile dealer or repair shop. Such a purpose cannot be the sole purpose of the individual development account. Participants must also save for another approved purpose; and

    6. (6) Qualified emergency withdrawals.

  2. (b) However, Temporary Assistance for Needy Families matching funds shall only be used for the purposes set forth in subdivisions (a)(1)-(3) of this section.


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