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Nevada Assistive Technology Loan Fund
This document sets down the procedures and requirements for the funds granted by the Department of Human Resources "Fund for a Healthy Nevada" to the Nevada Community Enrichment Program for the Nevada Assistive Technology Loan Fund. The Loan Fund is a statewide program for making loans to purchase Assistive Technology to improve an individual's independence or to assist them in becoming more productive members of the community. This program will also provide loans to small businesses in Nevada to improve or provide access for people with disabilities. The ATLF the bank partner will make loans to qualified borrowers, who have been referred through the Nevada Community Enrichment Program or their designee, in accordance with the requirements as stated in this document.
ELIGIBILITY OF BUSINESS LOAN APPLICANTS
- DEFINITIONS: Terms used in this document shall have the meanings as presented below.
- "NCEP" means Nevada Community Enrichment Program.
- "The bank partner" means Nevada State Bank, which formally implements these guidelines and offers ATLF loans
- "Loan Fund" means the Nevada Assistive Technology Loan Fund (NATLF).
- "Loan Fund Account(s)" means the Account(s) set up by NCEP with its the bank partner to provide the collateral guarantee for the loans issued under this program.
- "Board" means the Assistive Technology Loan Fund Advisory Board.
- "Loan Coordinator" means the Assistive Technology Coordinator at NCEP who administers the Loan Program.
- "Supplier" means the business/vendor/retailer/etc. who has been confirmed by the Loan Coordinator as the source of the Assistive Technology being purchased.
- "Grant" means the "Fund for a Healthy Nevada" grant issued by the State Department of Human Resources.
- "Assistive Technology" means any item, device, piece of equipment or product system, whether acquired commercially off the shelf, modified or customized, that is used to increase, maintain or improve functional capabilities of individuals with disabilities.
- LOAN FUND ADMINISTRATION.
- The total amount of the loans outstanding will not exceed two times the balance in the Loan Fund Account(s). If, at any time, due to loan defaults, the balance of loans outstanding exceeds 200% of the balance of the Loan Fund Account(s), then the Bank Partner has the option of suspending lending activity until the matter is resolved.
- NCEP shall maintain the Loan Fund as provided in the grant issued by the Department of Human Resources.
- The Loan Fund Account(s) shall bear interest at a rate of Prime minus 3%, renewable/ adjustable annually.
- The only circumstances under which funds can be withdrawn from the Loan Fund Account(s) is as follows:
- Interest accumulated in the State-funded Loan Fund Account(s) can be used to pay NCEP costs to administer the Loan Fund program. Interest from the deposit account will be transferred on at least a quarterly basis to a Money Market account. Interest earned on any federal funds may only be used to pay loan defaults.
- When a borrower in this program defaults on his/her loan. The bank partner will notify NCEP of any defaulted loan in this program, the Loan Coordinator will prepare a letter, signed by the NCEP designee, giving the bank partner authorization to remove a specific amount of money from the Loan Fund Account(s) to cover the defaulted loan. This letter will be sent to the bank partner, within 30 days from the date of notification by the bank partner. If no such notice is received within thirty (30) days, then the bank partner shall be authorized to withdraw funds from the Loan Fund to be applied to the default. This paragraph shall survive the termination of this program and this document.
- In order for NCEP to recover funds removed from the Loan Fund Account(s) because of a loan defaulted charged to the fund by the Bank Partner, the Loan Coordinator may negotiate a new payment structure with the respective borrower for the payback of money originally borrowed. The monthly payments and term of the recovery plan will be designed to fit the budget of the borrower in question. Loan interest on the recovery plan may be waived at the Loan Coordinatorís discretion. Monthly payments from recovery plans will be made directly to the Loan Fund Account(s).
- The Department of Human Resources may, at its discretion, replace NCEP as director at anytime. All other provisions of this agreement and loans previously made shall not be affected by any change in directors.
- ELIGIBILITY OF INDIVIDUAL LOAN APPLICANTS
To be eligible for a loan, the Loan Fund Coordinator will ensure the applicant meets and can provide information for the following requirements:
- Must be a Nevada resident, or parent/guardian or an immediate family member of a Nevada resident, with a physical or mental impairment that substantially limits one or more major life activities.
- The impairment can be temporary providing it will last at least as long as the term of the loan.
- Verification of the impairment is required. The verification can be a letter from a physician or hospital, or documentation showing eligibility for a federal, state, or county disability program. In the case of a temporary impairment the verification must state how long the impairment is expected to last; and
- Must provide proof of income; and
- Must provide the Loan Coordinator with cost estimates for the Assistive Technology item(s), to be purchased, on letterhead from the vendor/supplier/etc; and
- Must provide proof of rent or mortgage amount; and
- Must sign the disclosure agreement required by guarantor; and
- Will not be eligible for an ATLF loan if their monthly income, less medical expenses, is in excess of 500% of the federal poverty level. This will ensure that those with the resources to help themselves are not crowding out lower-income applicants. The Loan Coordinator will determine this eligibility. Higher-income applicants are encouraged to apply for a regular bank loan.
- UNDERWRITING GUIDELINES AND PROCEDURES.
When the above requirements have been met, the Loan Fund Coordinator will refer the applicant to the designated Nevada State Bank Branch to apply for the loan. At the time of application the applicant will supply the bank partner with the signed Authorization for Release of Information, The Loan Transmittal Letter, the Memo of Understanding, and verification of income and expenses used by the Loan Fund Coordinator to determine eligibility under the program. Upon completion of the Bank Partnerís consumer loan application, the Bank Partner may ask for additional documentation as required to underwrite the loan application using the Bank Partnerís standard underwriting and processing procedures which complies with banking regulations.
The Banking Partner will underwrite the loan and will render a credit decision within 4 business days. The Bank Partner will notify the applicant and Loan Fund Coordinator of the decision by phone on all approvals. All application approvals will be included in the program as far as guarantee and collateral are concerned.
On any decline, the Banking Partner will review the application using the following program guidelines. If the applicant meets the program guidelines the loan will be approved as noted above and the applicant and Loan Fund Coordinator will be notified by phone. If the applicant does not meet the programs guidelines the applicant and Loan Fund Coordinator will be notified by phone and the applicant will be notified in writing of the original decline per Regulation B requirements. The applicant will also be notified by the Loan Fund Coordinator that the decline may be Appealed based on the Appeal Process as noted in this agreement.
Loan Fund Program Guidelines
- Must have a debt to income ratio of no more than 55%. Payments for the calculation include but are not limited to rent or mortgage (actual cost), second mortgage, mobile home space or lot rental, auto loans or leases, credit cards or credit obligations, child support, alimony, and the amount of payment on the new loan; and
- Must not have filed for bankruptcy in the last 12 months, prior to the date of loan application for reasons other than current disability.
Note 1: For any bankruptcy occurring within the past 60 months, verification of the cause for the bankruptcy will be required including a detailed explanation of the bankruptcy along with
discharge paperwork, schedule of debts, and all pertinent
paperwork regarding the bankruptcy.
Note 2: If a bankruptcy occurred within the last 12 - 60 months for
reasons other than the current disability, a co-signer will be
required. The co-signer is subject to the same credit
- Within the last 12 months, may not have more than one of the following:
- Three "30 days late" entries on their credit report.
- One "60 days late" entry on their credit report.
- One "90 days late" entry on their credit report; and
- Within the last 12 months, must have no more than one charge-off or collection account, if the charge-off or collection account is due to the current disability. If the charge-off or collection account is not due to the current disability, a co-signer will be required. The co-signer is subject to the same credit requirements.
- If no credit has been established, verification of payment history will be obtained from non-credit bureau items (rent, utilities, etc.).
Applicants seeking a loan to make a business facility accessible to clients or employees, will be subject to the standard underwriting guidelines of the bank partner.
POLICIES AND PROCEDURES FOR LOANS TO INDIVIDUALS
All applicants must follow the procedures presented below before referral to the bank partner. Most of the information can be collected by phone and/or mail. Applicants must be informed by the Loan Coordinator of the Loan Fund requirements and the applicant's rights to appeal.
- Loans will only be made for purchase money transactions. Loans cannot be used to payoff an existing loan or to pay for an item that the applicant already possesses.
- Loan recipients will receive their loan proceeds made payable to both the borrower and the supplier/vendor.
- LOAN TERMS PROVIDED BY BANKING PARTNER IN CONJUNCTION WITH THIS PROGRAM
- Loans shall bear a preferred interest rate based on the current Wall Street Journal prime rate at the time the loan is made. Loans with a term of over 10 years will have their rate re-adjusted to Prime Rate every 5 years.
- Loan amounts will be:
There will be no prepayment penalty on ATLF loans.
A receipt for the purchased item(s) must be provided to the Loan Fund Coordinator within 30 days of receiving the loan. If no such receipt is provided, the ATLF has the option of assuming the loan and imposing an interest rate of 18%.
The bank partner will receive all loan payments directly and service the loan until it is paid in full.
The applicant must sign the loan application, transmittal letter, and memo of understanding. These documents will be submitted-- along with the loan application and verification of income and expensesóby the Loan Fund Coordinator to the Bank Partner. They will be submitted within one business day of receipt from the applicant.
The applicant will consent to receiving Consumer Credit Counseling Services, should their loan fall 60 days delinquent, and to the release of their loan and credit information to the ATLF.
After a loan is successfully made, the Loan Fund Coordinator will conduct at least two follow-up surveys for each successful loan applicant to determine consumer satisfaction. The information from the surveys will be maintained by NCEP for the purpose of reporting demographics.
- Up to $15,000 for vehicle modifications, for a term of up to 10 years.
- Up to $20,000 for an electric wheelchair, for a term of up to 10 years.
- Up to $25,000 for home modification, for a term of up to 20 years.
- Up to $10,000 for other assistive technology, for a term of up to 10 years.
Note: The first follow-up will be conducted within two weeks after loan approval. The second will be conducted six months after loan approval.
The applicant must have a major role in selecting the technology to be purchased
Whenever appropriate, the applicant may be required to have an independent assessment of their needs by a qualified individual or team.
The applicant, with help from the Loan Fund Coordinator, should identify more than one manufacturer or source for the technology, unless only one company supplies the product.
Note: The applicant must know the cost from each source, and what is included in the cost.
The applicant must be aware of what training and maintenance is available.
Whenever possible, the consumer must try out the equipment or device before it is purchased, to ensure that it meets their needs and expectations.
POLICIES AND PROCEDURES FOR LOANS TO BUSINESSES
LOAN TERMS AND CONDITIONS
- Total loans to businesses shall not exceed 33% of the total loans available from the ATLF.
- All business applicants will be referred to the bank partner to complete the application process.
- Loan recipients will receive their loan proceeds made payable to both the borrower and the supplier/vendor.
- Loans shall bear a preferred interest rate of Wall Street Journal Prime Rate, as of the date of the loan.
- To qualify for a business loan under the loan program, a business must have less than 15 employees or less than $5 million in annual gross income based on tax returns. If the business loan request exceeds the program guidelines, the business loan will be underwritten and decisioned based on the Banking Partnerís normal business loan terms, pricing, and underwriting guidelines and will not be included in the loan program.
- Loans will be made up to $30,000 for accessibility modifications or equipment.
- Those businesses with less than 15 employees but with a gross income of $5 million or more must pay at least 25% of the accommodation expense outside the loan.
- Those businesses with gross income of less than $5 million regardless of the number of employees must pay at least 10% of the accommodation expense outside the loan.
- The standard term of each loan shall be a minimum of 12 months and up to 60 months.
- There will be no prepayment penalty on ATLF loans.
- The bank partner will receive all loan payments directly and will service the loan until it is paid in full.
- After the loan, the Loan Fund Coordinator will conduct a follow-up survey with each business loan recipient to determine their satisfaction. The information from the surveys will be maintained by NCEP for the purpose of reporting demographics.
- The accessibility modifications performed shall be completed by a licensed contractor.
- Individual applicants for a Nevada Assistive Technology Loan must be referred through NCEP or their designee. Business applicants may come from any source.
- Loans to individuals shall be given in an amount recommended by the Loan Fund Coordinator which is reasonable to acquire the technology. In no event shall any loan exceed the limits established in section 4, paragraph B.3).
- The primary collateral for each ATLF loan shall be provided by the Loan Fund Account(s) set up by NCEP with the bank partner. NCEP will be the guarantor for each loan under this program. When practical, the Bank Partner is encouraged to take a security interest in items purchased or modified with ATLF funds through such methods as deeds of trust, liens on titled vehicles, and UCC filings for consumer products with a price greater than $7,500. This applies to both individual and business loans.
- If a loan is in default and it is not practical for security to be repossessed or foreclosed upon, the Bank Partner will assign interest in that security to NCEP upon the payoff of the loan with guarantee funds.
- The bank partner will put a blanket "hold" on the Loan Fund Account(s). NCEP will be authorized by the bank partner to withdraw only interest earned on the Account(s), but not principal. The interest earned and withdrawn will be used according to all program guidelines and at the direction of authorized State of Nevada personal. Interest earned on State of Nevada monies is only to be used for the operation of the ATLF. Interest on Federal monies is only to be used for the payoff of defaulted loans. The Bank Partner will authorize the program to continue lending up to the point at which loans amounting to 200% of the Loan Fund Account(s) have been made.
- The Bank Partner will provide a monthly report to the Loan Fund Coordinator, detailing all loans made and paid off in the past month, and all loans currently outstanding in the ATLF program.
- All borrowers will have the option of reducing the interest rate on their loan by 0.25%, by having their monthly payment automatically deducted from their deposit account at the Partner Bank.
- The bank partner shall prepare all loan documentation, after the loan application has been submitted and approved. The Bank will complete all loan closings.
Note: When a loan has been approved and signed, the bank will issue a check made payable to both the borrower and the supplier.
An individual loan applicant has the right to appeal a loan denial.
- The consumer will appeal to the Loan Fund Coordinator within 30 days of the denial of the loan, and will supply a copy of their loan denial. The Bank Partner will supply a copy of the applicantís credit report.
- The Loan Coordinator will compile all facts of the case into a file.
- The file will be void of borrower's name or any identifying information.
- The file will be given a number as identification.
- Copies of the file will be distributed to consumer and all Board members.
- By a formal vote, the Assistive Technology Loan Fund Advisory Board has the ability to support the appeal of the applicant. The Loan Fund Coordinator may schedule a teleconference in order for the Board to render a recommendation. The decision of the Board will be made within 30 days of the appeal being filed. The Board will determine one of the following two courses of action.
- Elevate the loan application to the next highest lending authority of the bank partner's loan division, along with their recommendation to approve. Under this option, the bankís next decision will be final; or
- Turn down the appeal.
- The consumer may be present to participate in the teleconference.
- The Loan Fund Coordinator will participate in teleconference.
- The teleconference may be recorded if all participants are made aware of the recording.
- All loan administration will be handled by the bank partner. The bank partner will receive all loan payments and service the loan until it is paid in full.
- The bank partner shall follow its normal collection procedures on delinquent loans, except that the bank partner will notify NCEP of any delinquent loan which is 60 days past due.
- The Loan Fund Coordinator will ensure that any client who falls delinquent receives Consumer Credit Counseling Services, as outlined in the memo of understanding signed by the applicant at the time of their loan.
- If there is a loan default, the bank partner will notify the Loan Fund Coordinator of the default and request payment in full on the remaining balance of the defaulted loan. A defaulted loan is defined as one in which is 90 days in arrears.
Note: After all efforts to prevent a default on the bank loan have failed, the Loan Fund Coordinator will have the option of negotiating terms with the defaulted borrower under the conditions described in section 2, paragraph E.
BASIC STATEMENT OF PURPOSE
- The Loan Coordinator shall assign each applicant entering into the appeal process an individual case number, when necessary, for the purpose of confidentiality.
- Any data used for statistical or demographic purposes must not be directly traceable to an individual's identity.
- Only information required by the bank partner for processing an individual's loan application will be forwarded to the bank partner. The Loan Fund Coordinator will verify the applicantís disability, but will not provide the details of that disability to the Bank Partner.
The purpose of this document is to establish the basic operating procedures necessary to implement and operate the Nevada Assistive Technology Loan Fund. The Nevada Assistive Technology Loan Fund has been developed to provide a financial loan program for Nevada residents with disabilities who can benefit from the use of assistive technology equipment or devices, and for small businesses needing to make their facilities accessible.
REVISION OF THIS DOCUMENT
The purpose of this Loan Fund is to meet the needs of disabled individuals throughout Nevada and, at the same time, to maintain a viable program.
- This document must be approved by an NCEP representative, the Nevada Assistive Technology Loan Fund Advisory Board, and the Bank Partner.
- This document can only be changed by approval of all parties listed above.
SIGNED AND ACCEPTED
Gary Gibson, Nevada State Bank Date
Bob Hogan, Nevada Community Enrichment Program Date
Reggie Bennett, ATLF Advisory Board Date
Revised May 14, 2001