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CDFA Spotlight:
Alternative Finance Programs For Persons With Disabilities
By Stan Provus |
Preface
This article coverst the status of Alternative Finance Programs (AFPs) for persons with disabilities. AFPs help people with disabilities finance the purchase assistive technology. If you would like to contribute an article to the Learning Corner, please contact Stan Provus.
Body
If a person with a disability needs to purchase assistive technology (AT) such as a wheelchair or other mobility device, a specialized computer, home accessibility modifications, or an adapted car or van, these items may not be affordable to many people with disabilities who need them. In many cases, other potential sources of AT funding are not available due to funding limitations or eligibility restrictions. While bank loans are another option, many do not meet conventional underwriting standards. These sources include health insurance and vocational rehabilitation programs. In other cases these sources may only fund part of what is needed. For example, in some states vocational rehabilitation programs may pay for a lift in a van but they will not pay for the van itself.
The AFP was authorized under Title III of the Assistive Technology Act of 1998 and was designed to help persons with disabilities overcome financial obstacles to accessing AT. AFP enable people with disabilities to qualify and receive below market rate loans to purchase AT devices or services. Since the program’s inception in FY 2000 and through FY 2004, the U.S. Dep’t of Education had provided matching grants of $53 million to some 31 states. The $53 million of federal funds along with $19.8 million of matching funds brought total capitalization to $73 million. From FY 2000 to FY 2003, the AFP had provided assistive technology loans to 1,515 totaling $15.5 million. These activity and funding totals exclude the Finance Authority of Maine (FAME) program, called the Kim Wallace Adaptive Equipment Loan Program, which provides direct loans to both individuals and businesses to help them purchase AT. The FAME program was the first AFP in the country and funded with a $5 million GO bond issue in 1986. Since inception, it has provided assistance to over 1,000 people and businesses.
While a number of states operate direct loan programs (Arkansas, Missouri, and Virginia as well as FAME), most states have established loan guaranty programs with lenders including commercial banks and credit unions. Many states also offer interest-rate buydowns as well. Loans are made at interest rates typically below market rates and/or for longer terms than would otherwise be possible. Borrowers are typically low-income—averages fall in the $15,000-$25,000 income range.
The AFP are an excellent example of micro-loan programs for special needs populations. States could further assist these programs by funding and then expanding eligibility to small businesses like the Maine program. For more information about these programs contact me at 501.760.6000.
This article is intended to provide accurate and authoritative information in regard to the subject matter covered. The author and CDFA are not herein engaged in rendering legal, accounting or other professional services, nor does it intend that the material included herein be relied upon to the exclusion of outside counsel. CDFA is not responsible for the accuracy of the information provided in this fact sheet. The information provided has been collected from a variety of sources. Those seeking to conduct complex financial deals using the tools mentioned in this document are encouraged to seek the advice of a skilled legal/consulting professional.
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