Wanda Pacheco was pleasantly surprised at how quickly the bank account grew.

Each month, the Duluthian deposited $30 through a first-of-its-kind, antipoverty program called Family Assets for Independence in Minnesota. Like a 401(k) for the working poor, the statewide program matches Pacheco and other participants' money three to one, helping them save to buy a home, start or expand a business, or go to college.

Pacheco is among dozens from Duluth who have participated in the program and one of hundreds from across the state. Nationally, 10,000 low- and moderate-income Americans have begun to save through similar programs in at least 250 communities in 47 states.

Pacheco saved nearly two years with FAIM's help to buy a house -- a beauty: three bedrooms, new construction, breathtaking views of Lake Superior and even a ground-floor apartment she rents for a little extra income.

"The program helps you make your dreams come true," said Pacheco, a native of Puerto Rico who has worked for Women's Transitional Housing in Duluth since 1991. She's a women's advocate and property manager and lives in her Central Hillside home, just below Cascade Park, with her 14-year-old daughter. She rents the ground-floor apartment to her brother, an employee of Duluth Clinic.

"I wanted a house for such a long time. If it wasn't for the program, I wouldn't have had the chance," she said. "I've always just wanted the best for my daughter, a place to call home. We're very happy. It's a beautiful house. I love it all, but I like my bedroom the best because I have a view of the entire lake. And I have a big walk-in closet that even has a window."

FUTURE IN JEOPARDY

The good news for FAIM is that it's filled with an abundance of success stories like Pacheco's. The potential bad news is that the pilot project is scheduled to conclude at the end of 2003.

However, efforts already have begun to renew funding.

In Duluth, FAIM's matching money comes from the federal government, the state and from the Northland Foundation. Each committed $500,000 to the program when it was created in 1998.

Like other foundations and corporations involved with FAIM, Northland will have to decide for itself whether to continue the relationship.

"It's a great program, but it's a tough program, too," said Mary Robillard, the foundation's manager of grant programs. The foundation doesn't fund it alone and has to count on continued commitments from the state and federal governments.

"The program fits very well with our focus of helping people become more self-reliant," Robillard said. "Whether we remain involved is a decision for our board."

At the federal level, legislation to fund FAIM was introduced and highlighted at a White House event in February. The legislation would expand FAIM and similar programs around the nation. The Senate Finance Committee passed the bill with $1.2 billion in funding, and it now awaits action by the full Senate.

"We have every reason to be optimistic," Minnesota's FAIM Coordinator Denise DeVaan said from her office in the Twin Cities.

There's reason to be optimistic about rumblings in St. Paul, too, she said. This summer, the state changed FAIM's status from "pilot" to "ongoing." And the Minnesota Department of Children, Families and Learning was able to find room for the project in the governor's upcoming proposed budget. If approved by the Legislature this session, FAIM will receive $500,000 from the state every two years.

PROGRAM HAS FANS

"Based on its success, the program really should be continued and even expanded. What we've learned is that it works. It really works," said Jan Hogan, a professor in the University of Minnesota's Family Social Science Department who is conducting an independent study and analysis of FAIM.

She was intrigued by the program when she first heard about it two years ago and decided to check into it further.

"It was the first antipoverty strategy I had heard of in years that was new," Hogan said. "It involves asset-building. There's more than just transferring cash from the government to people in need. This is something that helps people to get themselves onto the road to upward financial mobility."

Hogan interviewed 25 participating FAIM families over the past two summers to analyze the initiative.

She found one woman who refused to turn on her air-conditioning despite stifling summer heat, a family that stopped eating out and a single mother who offered to vacuum her apartment building's hallways for reduced rent -- all so they could afford the $30 a month it took to participate.

"What I found is that most of the families in the program stay in the program," Hogan said. "And most of them reach their goals. They do it by some of the most extraordinary means. But that's the good thing.

"This is a hand up, not a handout," she said. "The program preserves dignity. People are saving their own money. And they're reaching goals they set."

HUNDREDS HELPED

Across Minnesota, 566 families participated, or are participating, in FAIM. Already, they have saved a total of $215,984. Most of the participants -- 83 percent -- are female. More than a third are members of minorities.

In Duluth, 31 individuals or families have saved money through the program, according to Pam Johnson of Community Action Duluth, which runs FAIM locally. Another 40 Duluth-area families are on a waiting list to participate, despite no efforts to recruit or to advertise. Only five of Duluth's participants have dropped out before reaching their goals.

"The people in the program get me so excited," Johnson said. "They work so hard and want so bad to make this work. That's infectious. It's neat. I get to see them succeed."

FAIM participants are required to meet income guidelines, which are set at twice the federal poverty level. Individuals can't earn more than $17,180 a year to participate. A family of four can't make more than $35,300.

In Duluth, 15 percent of the population -- or about 12,800 people -- earn incomes at or below the federal poverty level, according to census figures.

"We just hope with the success of the program, we'll be able to keep it going and help more and more people," Johnson said. "These are people who work hard but don't make enough to get ahead. It's so much better to help them gain assets than to give them a handout. People don't want to be on welfare."

In addition to meeting income requirements, Duluth's FAIM participants are required to attend classes on how to buy a home and on how to budget and manage money.

Half of the participants in Duluth used or are using their saved money to buy homes. Five have already closed on their new properties.

The other half of the participants, who range in age from 19 to their late 50s, used or are using their money to start or expand a business. Ventures include computer graphics, music, arts, writing, catering, a cleaning service, seamstress, and a hair and nail salon. Four of the businesses have already been created or expanded. The rest are being planned.

Tara Vatalaro used her money to expand the child care business she runs out of her East Hillside home. She bought a larger refrigerator for additional food and a new computer to help keep track of the children's needs and other information.

Now, she's saving through FAIM to go back to college. She dreams of a certification that will allow her to open and operate a larger child care program in a building that's not her home.

"I don't want to switch careers. I want to keep working with children," Vatalaro said. "This program is helping me so much to get to where I want to be. I am so grateful."