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AFTAP Home
Policies and Procedures
REVISED 2-03-01
- Purpose
The Assistive Technology Guaranteed Loan Program assists Maryland citizens with disabilities to secure the technology they need to become more independent and more productive members of the community with an improved quality of life. The Program provides loan guarantees and interest rate subsidies to help people with disabilities, their families and friends qualify for loans to purchase assistive technology.
These policies and procedures establish the guidelines for operating the Program. The Board of Directors duly authorizes these procedures and updates them as necessary.
The Program provides the following services:
A. Information and Referral to all parties who inquire about loans. The Program may recommend sources for identifying alternative equipment and funding, refer individuals to other agencies that may assist them to secure assistive technology equipment and services, and offer other related assistance as needed. While the Program offers information and referral to all potential loan applicants, it does not require anyone to accept this service.
B. Consumer Counseling. The Program offers consumer counseling to all applicants approved for loans. Counselors will assist borrowers to select equipment and vendors, apply for alternative financial aid, apply for loans, purchase assistive technology and related services, and resolve payment problems. Consumer counseling is an optional service, but may be strongly suggested for borrowers who fall behind on their loan payments.
C. Loan Guarantees. The Program may guarantee loans for applicants who are declined for loans by participating lenders based on the lenders’ standard underwriting criteria. To be eligible for a loan guarantee, an applicant must demonstrate an ability to repay the loan, must be creditworthy, and must meet the Program criteria detailed in these policies and procedures.
- Interest Rate Subsidies. The Program may "buy down" interest rates on
loans to provide affordable monthly payments for borrowers.
- Application Process
A. Initial Contact. When individuals contact the Program, staff will offer information and referral (i.e., recommend sources for identifying alternative equipment and funding, refer individuals to other agencies that may assist them to secure assistive technology equipment and services, and offer other related assistance as needed).
If the individual states an interest in applying for a loan, the Program will determine from which participating lenders the applicant may be eligible for a loan. Specifically, the Program will review the eligibility criteria for any participating lenders (i.e., credit unions) that have limited membership to determine whether the applicant is eligible. The Program will discuss with the applicant his/her lender options and send the applicant an application packet. The packet will contain a Program application form, lender information, lender application(s), an instruction sheet and other pertinent materials. The instructions will direct the applicant to select a participating lender (if s/he is eligible for a loan from more than one) and complete the application form for that lender.
The Board may assign an application to a participating lender of the Board's, rather than the applicant's, choice, if the Board deems this action to be in the best interest of the Program.
B. Application. The Program application will include the following information and required attachments:
- Applicant’s legal name
- Nature of relationship to the person with a disability who will use the assistive technology
- Nature of disability
- Description of assistive technology being requested and how it will compensate for the limitations of a disability and improve the independence and/or quality of life of a person with a disability (e.g., facilitate employment, education, independent living)
- Amount of loan request including costs of equipment purchase, extended warranty, service agreement, insurance, training, maintenance and repair
- Signed statement verifying truthfulness and accuracy of all information submitted
- Signed statement authorizing release of information about the applicant between the Program and participating lender(s)
The lender application will be a standard consumer loan application form.
C. Application Completion. The Program will offer any needed assistance to complete the application forms. The applicant may receive help from Program staff or may elect to receive consumer counseling.
D. Initial Application Review. Upon receipt of an application, the Program will assign a case number to the application (for reasons of confidentiality) and will perform an initial review to verify that the applicant is seeking a loan for assistive technology for an individual with a disability. If the Board needs additional information to verify the need for and appropriateness of the equipment, it may require evaluation reports, physicians’ orders, or other documents.
The Program will then forward the lender application to the participating lender chosen by the applicant. The lender will approve or decline the application, and report the decision to the applicant (in writing) and to the Program. For approved loans, the lender will direct the borrower to the appropriate branch office (or instruct him/her to follow an alternative procedure) to close the loan.
E. Board Review of Applications Declined by Lenders. The Board will review applications declined by lenders to determine (1) whether to guarantee the loan, and (2) whether an interest subsidy should be provided, based on the criteria listed in IV. and V. below. If the Board opts to guarantee a loan, the Program will notify the borrower of its decision in writing or appropriate alternative format
To decide upon an interest subsidy for a guaranteed loan, the Board will follow the policy outlined in V. below.
If the Board declines a guarantee, it will send the applicant an adverse action letter. The letter may offer an alternative to the applicant, such as approval for a lesser amount, approval with a qualified co-signer or other conditions.
- Final Review of Applications. Approvals from the Board are conditional, and will specify the documents the applicant must furnish to the program in order to close a loan. At a minimum, the applicant must provide the following:
- Verification of the equipment user's disability.
- Proof of the applicant's income.
- Price quotes for all items to be purchased.
For vehicles, the applicant must also provide:
- A quote for full coverage insurance.
- If the vehicle is to be modified by another source, written verification of funding from that source.
The blue book value of the vehicle must generally equal or exceed the loan principal.
Home modifications require submission of two bids from licensed, bonded contractors who (a) have demonstrated experience providing the type of modification requested, (b) provide a firm, fixed price quote and (c) provide a turnkey service.
- Closing Guaranteed Loans. At its discretion, the Board may require additional conditions, including automatic debits for loan payments or credit insurance. The Board may require co-signers or other measures to approve loan guarantees for applicants with terminal illnesses. Upon satisfaction of all conditions, the Program will notify the lender that it will provide a loan guarantee. The Program will then provide the guarantee according to the procedures and timelines listed in the agreement with the participating lender. The lender will direct the borrower to the appropriate branch office (or instruct him/her to follow an alternative procedure) to close the loan.
All documentation needed to close a conditionally-approved loan should be submitted within 90 days of conditional approval. Time-sensitive documents (e.g., pay stubs) must be current within 30 days at the time the last required document is submitted to the program. Applicants who fail to submit documents within these deadlines may need to reapply.
IV. Criteria for Loan Guarantees
The Program may provide loan guarantees for borrowers who:
- Are current Maryland residents
- Are legally able to enter into a binding contract with a lending institution
- Demonstrate they will use loans to purchase assistive technology for one or more Maryland residents with disabilities
- Are able to repay their loans and are creditworthy
The Board will use the following specific standards to determine whether to approve loan guarantees.
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Standard |
Acceptable Criteria for the Program |
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Type of residence |
1. Borrower owns or rents his or her own residence and payments have been on time for at least the past year. 2. Generally, a borrower who has little discretionary income and is living in government or family subsidized housing should assure that the living arrangements would not change in the near future. Should income increase due to the assistive technology purchase (e.g., the individual will start a job), the Board will generally waive this requirement. |
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Length of time at residence |
Generally, the applicant should have a minimum of one year’s length of stay, unless:
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Source of income |
The Board prefers that applicants be engaged in stable employment. The Board may consider approving guarantees for unemployed applicants who have the ability to repay loans, are creditworthy, have stable living arrangements and a current relationship with a financial institution. |
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Gross income |
The Program has no specific income requirement for a guaranteed loan. |
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Deposit relationships |
In order to demonstrate stability, the applicant should generally have a current relationship with a financial institution. |
|
Standard |
Acceptable Criteria for the Program |
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Credit history |
Applicants with a questionable credit history will require additional information and verification. The Board will carefully consider credit records and may deny loan guarantees for applicants with unjustified poor credit. Credit history priorities are as follows: 1. No adverse credit history. 2. Good credit within the past year. Previous credit problems have been worked out with the creditors, and/or debt load and other expenses have been reduced. Prior bankruptcies, defaults, slow payments and other credit problems may be considered on a case by case basis. Additional documentation may be requested. 3. Poor credit history, including bankruptcy, may be excused-especially if related to the individual’s disability- provided the individual has taken appropriate steps to resolve the credit problems (e.g., negotiating repayment schedules with current creditors, reducing debt load and living expenses, securing employment). Certain slow pay situations will also be considered (e.g., over 30 days past due). 4. Poor credit history is generally unacceptable if not related to the individual’s disability. An applicant who lacks acceptable credit may provide a qualified co-signer. |
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Debt to income ratio |
1. The Program will generally consider a maximum 50% debt to income ratio if the borrower can adequately document sufficient cash flow to make loan payments. 2. For debt ratios in excess of 50%, an applicant may demonstrate (using the Program's Living Expense Budget Form) that his/her income, minus all expenses, leaves him/her with disposable income adequate to make loan payments required for his/her loan. 3. Vehicle insurance payments will be considered as debt.
Security Income (SSI) payments secured through SSI work incentives (i.e., Plans for Achieving Self Support (PASS), Blind Work Expenses (BWE)). 5. The Board may approve loans to individuals who have additional projected income because of an assistive technology loan, which is verifiable. |
V. Criteria for Interest Subsidies
Initially, the Program will provide interest subsidies to all borrowers who receive guaranteed loans. Each borrower will pay a fixed rate equal to the Wall Street Journal prime rate (at the time the loan is closed) minus 4 percentage points. The Program will provide the necessary subsidy to the lender to achieve this rate.
The Board will not provide an interest subsidy for a loan approved by a lender without a loan guarantee, with the following exception. If one participating lender approves a loan which would have been declined by another participating lender, the Board may buy down the interest rate for that loan to the rate offered for guaranteed loans. If the Board prefers, it may guarantee the loan (despite the lender's approval of the loan without a guarantee) and provide the usual interest subsidy for guaranteed loans.
The Board will reevaluate this policy within the first year of operation.
VI. General Loan Requirements
A. Loan Amounts. Loan amounts will be from $500 to $30,000, or from $1,000 to $30,000, depending on the agreement with the participating lender. The Board and participating lenders may, at their joint discretion, approve loans that exceed the maximum amount if such exceptions are justified and would serve the purposes of the Program. In particular, the Program may guarantee a loan of greater than $30,000, if more than one person with a disability will use the equipment to be purchased.
B. Loan Periods. Loan periods will be from one (1) year to six (6) years, or from one (1) year to seven (7) years, depending on the agreement with the participating lender. The Board and participating lenders may, at their joint discretion, approve loans that exceed the maximum period if such exceptions are justified and would serve the purposes of the Program. Agreements with participating lenders may specify additional conditions that determine the length of a loan period.
The period of a loan may not generally exceed the amortization schedule or the useful life expectancy of the equipment to be purchased.
The maximum period of a used vehicle loan shall be determined as follows:
Current model year and two previous model years - 60 months (72 months for loan amounts above $24,000.)
Previous three to six model years - 48 months
Previous seven to ten model years - 36 months
1. Wheelchairs
2. Motorized scooters
3. Braille equipment
4. Voice simulation systems
5. Scanners
6. Assistive listening devices
7. Telecommunications devices for the deaf
8. Augmentative communication systems
9. Environmental control units
10. Computers and adaptive peripherals
11. Building modifications for accessibility
12. Motor vehicles and vehicle modifications.
The Board will consider loans for home modifications on a case-by-case basis. The Program will not support loans for home modifications to rental units.
There must be a demonstrable connection between the end user's disability and the need for the equipment in order for the program to guarantee a loan.
The program will not guarantee a loan solely for the down payment for equipment.
- Documentation of Disability. The Board requires written documentation
of disability for end users of equipment to be purchased with loans through the Program. The documentation may be a disability benefits award letter, a written statement from a reputable professional or agency, or other appropriate form. Documents may be faxed or mailed to the Program.
E. Titles and Liens. The assistive technology equipment will be titled in the name of the qualifying borrower with the lender as lien holder. If the borrower defaults and the Program buys the loan from the lender, the Program will become the lien holder.
F. Insurance. The Board or the participating lender may require a qualifying borrower to insure the equipment for the remaining value of the loan. The cost of insurance, other than vehicle insurance, may be included in the loan (or a second additional loan).
G. Maintenance, Repairs and Upgrades. The qualifying borrower will be responsible for all repairs and maintenance of the equipment. The loan (or a second additional loan) may be used to finance repairs, maintenance, extended warranties or maintenance agreements, and equipment upgrades.
H. Joint Check Issuance. When a guaranteed loan exceeds $5,000, the Board will require the participating lender to issue the check jointly to the qualifying borrower and the vendor of the equipment or service.
I. Deadline for Loan Closures. When the Board approves a loan guarantee and/or interest subsidy, the applicant must close the loan with the participating lender within ninety (90) calendar days of the date of approval. Applicants who have not closed their loan within the ninety-day period may be required to re-apply to the Program for approval.
VII. Consumer Counseling
The Program will offer optional consumer counseling to all borrowers. The Program may provide counseling through its staff, through other agencies that agree to provide counseling as a free service, and/or may contract with counselors having personal and professional experience in assistive technology or credit. Counselors will assist applicants to select equipment and vendors, identify other available resources, complete loan applications, purchase assistive technology, and resolve payment problems for both guaranteed and non-guaranteed loans. The Board or staff will assign counselors to applicants upon request.
If a borrower has not elected to receive consumer counseling but later fails to make loan payments in a timely fashion, the Board may strongly encourage the borrower to receive consumer counseling to resolve payment problems.
VIII. Late Payments and Defaults of Guaranteed Loans
A. Monthly Reports.
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B. Collection Procedures. Each participating lender will follow its normal collection procedures for all delinquent loans. Upon notification (through monthly reports) of any past due loans, the Program will attempt to resolve late payment issues. The Program may contact the borrower directly or, with the borrower’s consent, assign a consumer counselor to provide assistance.
The Program and/or consumer counselor will attempt to help the borrower resume timely payments. If necessary, the Program may:
- Assist the borrower to apply for financial aid from appropriate agencies,
- Refer the borrower to the Consumer Credit Counseling Service or other financial counseling,
- Negotiate with the lender to reschedule payment terms (e.g., add additional payment(s) onto the end of the loan term),
- Arrange a refinance to provide lower payments,
- Make one or more monthly payments from Program funds to avert a default
C. Defaults. The Program will purchase from lenders at par value (principal,
interest, fees and other charges due) any guaranteed loan that becomes more than 90 days delinquent. The Program will complete the purchase before the loan becomes 120 days delinquent. Upon purchase, the lender will assign the loan, without recourse, to the Program.
The Program may institute appropriate measures to deal with equipment purchased with loans that have gone into default. Measures may include lease buyback, sale to secondary markets, and contracting with repossession firms to reclaim equipment.
- Grievance Process
An applicant who is aggrieved by a decision of the Board may petition the Board for reconsideration, in writing or appropriate alternative format, and provide additional documentation that addresses the stated reasons for denial.
The Board will:
- Consider the new information;
- Provide the applicant an opportunity to be heard; and
- Inform the applicant of its decision at the meeting or in writing or appropriate alternative format within seven (7) days if the applicant is not present at the meeting.
The decision of the Board will be final.
- Promotion
The Program and the participating lenders will actively work together to promote the loan program as needed.
A. Participation by the Program. Upon request, the Program will offer the following resources to market the loan program, jointly with participating lenders, to the targeted community:
- Program staff will be available to make presentations to lenders’ staff and to consult with them by telephone regarding the program.
- Program staff will promote the program to disability agencies and organizations through surveys, presentations, attendance at conferences, newsletters, press releases and other promotional activities.
- The Program will participate in cooperative direct mail marketing to the targeted population.
- The Program will add references to participating lenders on the Maryland Technology Assistance Program’s web site and will make links to lenders' web sites.
B. Participation by Lenders. Upon request, participating lenders will offer the following resources to market the program, jointly with the Program, to the targeted community:
- Each lender’s marketing staff will develop and produce a promotional brochure for joint use by the lender and the Program.
- Each lender will proactively communicate and build awareness of the program in its Maryland branch offices, including stocking of brochures and preparing branch associates to refer interested consumers to the Program.
- Each lender will add a reference to the Assistive Technology Guaranteed Loan Program on its web site.
1700 North Moore Street, Suite 1540
Arlington, VA 22209-1903
Phone: 703/524-6686 Fax: 703/524-6630 TTY: 703/524-6639
Email: info@resna.org http://www.resnaprojects.org/AFTAP