FAIM Frequently Asked Questions – State Grant 2085 – February 2022.
What does FAIM stand for?
Family Assets for Independence in Minnesota.
How do I apply for FAIM?
Locate the Agency Directory tab on this site and contact the agency providing FAIM in your county. If there isn’t an agency offering FAIM in your area, you may contact the agency serving a neighboring county. Ask to be screened for potential eligibility and to be placed on their local FAIM wait list. When enrollment is opened, they will work through their wait list to make contact regarding the application process and eligibility verification.
What documentation do I need for enrollment?
Valid Minnesota driver’s license or state-issued photo identification card as proof of MN residency. Copy of your current utility bill or signed lease in your name to verify your address. Your social security number or ITIN number. Proof of income to determine income eligibility.
What may be used as proof of income?
- Federal 1040 Tax Form – PREFERRED.
- OR, Previous year W2’s from all employment AND documentation of all other income/benefits for the year from ALL adults in the household.
- OR, Pay stubs from all employment AND documentation of all other income/benefits from ALL adults in the household for the previous 3 full months from date the application was signed. Example: FAIM application signed/dated on 2-12-2022 requires income for the full months of November and December 2021 and January 2022.
Can I enroll in FAIM if I receive Social Security?
You must have earned income to be eligible for FAIM enrollment. Social security is considered unearned income. If social security is your only source of income, you are not able to enroll in FAIM.
What is earned income?
Earned income comes from employment (wages) or self-employment.
Will enrollment in FAIM affect my eligibility for other programs?
Check with the other program to verify if having an IDA (Individual Development Account) would affect your eligibility for their program or those benefits.
Can I be enrolled in more than one FAIM program at a time?
No, there is only one FAIM program statewide in MN. You may only have one FAIM account.
Once enrolled, can I deposit more than $84 per month to my FAIM savings account?
Yes, but deposits to the custodial account must be made from earned income, Earned Income Tax Credit (EITC) or MN Working Family Tax Credit only. Once funds are deposited in the FAIM account, you cannot make withdrawals. Only deposits made within the time allowed by the program may be matched 3:1. Interest earned on savings and late deposits can’t be matched – no exceptions. The maximum savings that may be matched per household in a lifetime is $2,000. If you, or anyone in your household, have ever been enrolled in FAIM it may affect your eligibility for the program.
What if I need to withdraw my savings for an emergency?
Your deposits to the custodial FAIM savings account are your money but you will not have access to the funds without authorization from the program. A one-time emergency withdrawal may be allowed from the account but it must meet the program’s criteria of an emergency. Funds withdrawn must be replaced during your saving period to qualify for match. If funds are withdrawn from the FAIM account for anything other than an emergency (as noted in regulations) or your chosen asset, the account must be closed and you will be exited from the program. Your savings/interest will be returned to you but the match is forfeited back to the program.
Can I save for my child’s post-secondary education?
Yes. Education asset is the only track that the participant is allowed to use their FAIM account for benefit of their spouse, child, or tax dependent. Keep in mind that FAIM has a minimum enrollment period of 366 days and maximum enrollment is 30 months (2 1/2 years) from first deposit date so your spouse/dependent will need to register for courses within that timeframe.
Can FAIM funds be used to pay my student loans?
No, FAIM funds for education may only be used toward tuition and required books for the current term at an accredited post-secondary institute of higher education within the USA. Funds may not be used for exams, licensing, certification courses, some fees, study abroad, room/board, or expenses related to graduation.
Can I use the FAIM account to obtain my asset in another state?
No. The home or vehicle being purchased with FAIM funds must be located within Minnesota. Similarly, business start-up or expansion must be within Minnesota. FAIM funds for education may be used for courses taken in-person or online at an accredited college in another state, however, the FAIM participant must remain a Minnesota resident.
Once I am enrolled, can I remain in the program if I move to another state?
No. You must be, and remain, a Minnesota resident throughout your enrollment in FAIM.
Do I have to pay taxes on FAIM money?
No. Your deposits to the FAIM (IDA) account must be made from earned income which was already taxed. The funds used to match your FAIM savings is grant money which is held in a separate escrow account by the grant administrator. The matched payout completed for your chosen asset is made payable (and sent) to a third-party vendor. Thus, the FAIM saver is not responsible to claim the match as income or be taxed on those dollars.