Oklahoma Assistive Technology Foundation Loan Policy

Policy Number ADMIN-1

Oklahoma Assistive Technology Foundation (OkAT) Loan Manual

Effective Date:      July 25, 2007

The OkAT provides low-interest loans with favorable terms and conditions through the participating financial institution, BancFirst of Stillwater; and provides loan guarantees so that people with disabilities and their families may acquire assistive technology or computers and other equipment, including adaptive equipment.  The Board of Directors consists of nine individuals, the majority of which have disabilities or family members with disabilities.  The Board meets quarterly, or as needed, to conduct business and to make loan guaranty decisions.

This manual provides guidance to the OkAT Board, ABLE Tech staff and any other individuals working on behalf of the Alternative Financing Program (AFP) and Access to Telework Fund (ATF) to facilitate or guaranty loans.  The OkAT Board of Directors shall approve all procedures included in, and added to this manual and be consistent with the Laws of the State of Oklahoma and Bylaws of the organization.  The manual will be maintained and distributed by the OkAT Board President and ABLE Tech staff.

Policy Number ADMIN-2

Programs

Effective Date:      December 20, 2005

Oklahoma Assistive Technology Foundation in coordination with Oklahoma ABLE Tech has developed an Alternative Financing Program and an Access to Telework Fund to accommodate the needs of its customers, to meet its fiduciary responsibilities, and to follow the appropriate sections of the Laws of Oklahoma.  The program includes low interest loans and guaranteed loans made through a financial partner.  Program data will be collected and provided to Oklahoma ABLE Tech through the life of the AFP and ATF.

Fees and charges may be assessed to borrowers of any AFP and Telework loan, in accordance with the Laws of Oklahoma.  These fees may be for guaranty closing, administrative, liens or insurance purposes, as determined necessary by the Board.

Policy Number ADMIN-3

Definitions

Effective Date:      July 25, 2007

Access to Telework Fund provides support for alternative financing mechanisms such as the low interest loan or a guaranty loan to expand telework opportunities for individuals with disabilities.  The Access to Telework Fund can assist Oklahomans with disabilities to obtain financing for computers and other equipment including adaptive equipment in order to have a telework outcome.  Telework outcomes can encompass work that can be performed effectively from home and/or remote sites away from the office, such as work on the road or at a telework center.  Telework would apply to individuals with disabilities who experience a barrier(s) to employment and who are unemployed, underemployed, self-employed or needing to maintain employment on a full time or part time basis.

Alternative Financing Program provides support for low interest loans or low interest guaranty loans to maximize the independence and participation in society by Oklahomans with disabilities so they may purchase the assistive technology they need.  There must be a demonstrable connection between the end user’s disability and the need for the assistive technology.

Assistive technology means any item, product or piece of equipment that is used to maintain or improve the functional capabilities of individuals with disabilities.

Board means the Oklahoma Assistive Technology Foundation Board of Directors.

Buy down interest rate means OkAT will purchase a portion of the interest charged to borrower to reduce the actual interest paid by the borrower. 

A creditworthy individual is one who either has a good credit history with no adverse credit problems and/or an individual who is actively addressing his or her credit problems.  A creditworthy individual may also be one whose credit problems were related to excessive disability related expenses.

Ability to repay the loan is determined when an individual's debt to income ratio meets the standards set by the Board, assessing all income and other expenses.

Debt (or debt service) is defined as the monthly mortgage/rent payment, monthly payments for existing secured and unsecured loans including credit cards, alimony/child care obligations, and the monthly payment for the requested OkAT loan.

Default is defined as a loan that on or before, 120 days in which the borrower has not made a scheduled payment for the balance still owed; or at which time OkAT has paid BancFirst or another lending institution the remaining agreed upon balance of the loan.  The Board has the discretion to continue to make monthly payments beyond the 120 days in which the borrower has ceased payment if circumstances warrant.  The loan balance at the 120 day limit would be considered the default balance.

Equipment means tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.  For the purposes of the Telework Fund, equipment can be $5,000 or less per unit.  Inventory and supplies may also be purchased with Telework Funds as long as these items are attached to a specific piece of equipment to be used for a specific telework job to be considered on a case-by-case basis.

Income is defined as all net wages or salary, commissions, interest, pensions, and other sources of financial support, including Supplemental Security Income (SSI), Social Security Disability Income (SSDI) and retirement benefits. 

An individual with a disability is a person who self identifies a limitation to a major life function, such as walking, talking, seeing, hearing, taking care of oneself, learning, becoming employed or maintaining employment. 

Loan Coordinator means the assigned staff of Oklahoma ABLE Tech who administers the Loan Program.

The participating financial institution is BancFirst of Stillwater, or any insured lending institution, which has agreed to make loans to qualifying borrowers by signing an agreement with terms and conditions meeting OkAT program standards.

A qualifying borrower is defined as any creditworthy individual, is a resident of Oklahoma with a disability, or for persons that have a dependent with a disability, residing in the State of Oklahoma.  Funds borrowed under the program are to be used to purchase assistive technology devices and services, modify equipment or make adaptations to enhance the independence of people with disabilities in their homes, at work, in schools, or engaged in leisure activities. 

Rescue payment is a monthly payment by OkAT on behalf of the borrower to financial institution for a guaranty loan. 

A resident is a person domiciled within the State of Oklahoma from the time of application to loan closing.

Policy Number GENERAL-1

Low Interest Loan Program

Effective Date:      December 20, 2005

BancFirst of Stillwater agrees to be the participating lender provided through the deposit of a low risk interest bearing account by OkAT.  The amount is to be placed into a separate account by OkAT, at BancFirst of Stillwater, to ensure the availability of BancFirst funds for the guaranty loans.  The interest rate and term of the low interest and/or guaranty loans will be designated in the annual contract between OkAT and BancFirst.

Policy Number GENERAL-2

Application Process

Effective Date:      July 25, 2007

Applicants will receive application packets from OkAT, ABLE Tech, BancFirst of Stillwater or any BancFirst branch across the state.  Application packets will include a release of information to OkAT and ABLE Tech, the loan application of the bank, and any other pertinent materials.  Application packets will include all forms and instructions necessary to apply.

The OkAT generally does not ask for proof of certain disabilities.  However, the Board may ask for attachments to provide evidence of a disability or for justification to the OkAT for the device requested such as evaluation reports, doctor’s orders, or vendor quotes should the applicant wish to make a purchase of something that is not generally considered to be assistive technology.  OkAT does require an evaluation from a licensed audiologist if a person is requesting a guaranty loan for hearing aids.  The price of the evaluation can be part of the loan amount.  This requirement does not restrict the consumer from purchasing the recommended hearing aid device from any licensed hearing aid dealer. 

OkAT will offer optional consumer counseling to all borrowers.  The OkAT may provide consumer counseling through ABLE Tech staff or through other agencies that agree to provide consumer counseling as a free service.  Counselors may assist applicants in the selection of equipment and vendors, identify other available funding resources, completion of loan applications, and resolve payment problems for guaranteed loans.  The Loan Coordinator may refer applicants to consumer credit counseling upon request. 

If a borrower has not elected to receive consumer counseling but later fails to make loan payments in a timely fashion, the Loan Coordinator may strongly encourage the borrower to receive consumer counseling to resolve payment problems.

Upon receipt of a complete loan application packet, BancFirst will make its loan decision based on the terms and conditions as agreed to with OkAT.  If approved, the bank will refer the applicant to a branch of their choosing in order to close the loan.  The bank will notify the Loan Coordinator of its decision.  Upon referral from BancFirst of a loan closure, the Loan Coordinator will conduct a survey to collect consumer demographic information.

Should the bank reject the application or request the loan to be collateralized through OkAT, the BancFirst officer will notify the Loan Coordinator.  The Loan Coordinator will notify the applicant informing him/her that OkAT will consider the application for a guaranteed loan upon the return of a completed monthly expense sheet, applicant loan report, applicant agreement, and audiologist evaluation if necessary which will be provided by the Loan Coordinator.  Note: the Board will meet via telephone conference call within one week of the receipt of the necessary applicant documentation requesting loan guaranty. 

If the Board approves the application, the Loan Coordinator will refer the individual to BancFirst of Stillwater for closing.  Should the OkAT reject the applicant for a guaranteed loan, the Loan Coordinator will send an adverse action letter stating the reason for denial.  The letter may offer an alternative to the applicant, such as approval for a lesser amount or approval with a qualified co-signer.

The Loan Coordinator may consider an application to be incomplete and require that an applicant provide additional proof of income, proof of disability, or proof that the requested purchase meets the requirements of the program.

Policy Number GENERAL-3

Grievance Process

Effective Date:      October 24, 2001

An applicant who is aggrieved by a decision of the Board may petition of Board for reconsideration, in writing or appropriate alternative format, and provide additional documentation that addresses the stated reasons for denial.  The Board will consider any new information, provide the applicant an opportunity to be heard; and inform the applicant of its decision at the meeting or within seven (7) days of the meeting. 

The decision of the Board will be final. 

Policy Number LOANS-1

Loan Criteria for Guaranteed Loans - General

Effective Date:      February 3, 2004

The OkAT operates its programs for individuals with disabilities and their family members as special programs in accordance with the laws of Oklahoma.  The OkAT does not discriminate because of race, color, sex, ethnic origin, religion or age.  All borrowers must be legally able to enter into a binding contract with a lending institution.

OkAT will only guarantee loans to Oklahomans with disabilities and their family members who meet the Board’s standards of being creditworthy and are able to repay the loan which they are applying for. 

Policy Number LOANS-2

Income and Credit Criteria for OkAT Guaranty Loans -

Effective Date:      December 20, 2005

While OkAT provides guaranty for low interest loans to persons denied a low interest loan by BancFirst, the loan criteria must demonstrate a reasonable expectation that the borrower will repay his or her loan. Generally, OkAT is looking for a pattern of stability in its loan applicants in areas such as type of residence, length of time at residence and length of time at present job.  It is also looking for a pattern of stability with respect to credit history.  Where credit problems have arisen, it is essential that the applicant is doing something about those problems.  This includes reducing current debt, assuring cash flow is sufficient for living expenses and loans, and making written arrangements with creditors.  In making its determination, the Board also considers the nature and extent of an applicant’s credit problems, the fair market value of the item requested, and the total dollar amount of the loan.

The two most important criteria for an OkAT loan guaranty are credit history and capacity to repay.  A pattern of adverse credit that cannot be adequately explained and is not being dealt with will result in a declined application.  Similarly, an individual who does not have adequate resources after paying all other obligations (as measured by a debt service to income ratio) may not be approved for a loan guaranty.

While the Board may make exceptions for individuals who can prove their ability to repay, a 50% debt service to income ratio (including the monthly payment for the new, OkAT loan) is typically required for loan approvals.  Applicants who do not meet that requirement may provide a qualified co-applicant.

The Loan Coordinator will ask individuals having debt or credit issues to provide additional financial and/or other information in order to qualify for a loan guaranty.  Individuals having unacceptable credit may provide a qualified co-signer.  If the Board can not verify that an applicant's poor credit history is directly related to the individual’s disability, the Board will generally decline an OkAT guaranteed loan application.  OkAT will also generally deny individuals who do not have stability in their financial and personal lives.  For verification of income if an individual’s income is based on self-employment, OkAT will require the submission of the past year’s income tax return as signed and submitted to the IRS.

Policy Number LOANS-3

Loan Criteria for Guaranteed Loans - Specific Guidelines

Effective Date:      December 20, 2005

Residence: Stability can be demonstrated when the borrower owns or rents his or her own residence and payments and utilities have been paid on time for at least the past year.

Length of time at residence:  The OkAT prefers a minimum of a year’s stay, unless:

• A recent move was necessitated by a promotion, or
• The individual's relocation is related to their disability.

Length of time at present job: While applicants do not have to be employed to qualify for an OkAT loan, a minimum of one year’s continuous employment demonstrates stability and increases the likelihood of loan repayment.  Exceptions to this guidance include if the:

• Change is related to recent promotion
• Change of employment is related to the disability.

Credit history: Credit history priorities are as follows:

• No adverse credit history.
• Good credit within the past year. Previous credit problems have been worked out with the creditors.  Additional documentation may be requested.
• Poor credit history, including bankruptcy, will be considered if related to the individual’s disability.  Certain slow pay situations will be considered.
• Poor credit history is generally unacceptable unless it was caused or related to the individual’s disability.

Beacon Score: BancFirst uses a credit scoring system and credit reports as part of its decision process on all applicants.  The automatic scoring, or Beacon Score ranges from 400 to above 800.  Financial institutions typically require scores approaching 700 for loan approval.  A Beacon Score of 500 is generally required for OkAT to approve a guaranty loan. 

Debt to Income Ratio

The OkAT will generally approve an applicant with a 50% debt to income ratio if the borrower can adequately document sufficient cash flow for the loan.  Individuals with subsidized living arrangements may qualify for a guaranteed loan even if their debt to income ratio exceeds 50%.  Qualifying borrowers must document that they have sufficient resources to pay for all living expenses and still have a reasonable expectation of repayment before a loan may be considered by OkAT.  The Board may approve loan guaranty to individuals who have additional projected income, which is verifiable.  Individuals having approval for special funding (such as a Plan to Achieve Self Support or PASS through SSA) will be considered without regard to their debt to income ratio.

Policy Number LOANS-4

Loans for Tangible and Intangible

Effective Date:      December 20, 2005

OkAT may obtain the highest and most available collateral for all guaranty loans.  Home modification loans and loans for vans and automobiles will be collateralized through a deed of trust or the title, as appropriate.  The Board may request an additional lien from that held by BancFirst.  Applicants and advocates should note that OkAT intends to maintain the integrity of the loan process, recognizes its fiduciary responsibility to the State of Oklahoma, and expects repayment for all of its loans.

Policy Number LOANS-5

Loan Closing for Guaranty Loans

Effective Date:      January 22, 2003

A designated OkAT Board member will sign as guarantor for any guaranty loan as reflected in the borrower resolution.

Policy Number LOANS-6

Home Modification Procedure

Effective Date:      February 3, 2004

When a loan in excess of $5,000 is to be used for home modifications, OkAT will require two bids from a licensed contractor before distribution of funds.  The contractor must be regularly doing business in the home construction field, must identify a fixed, firm price, and provide a turnkey service.  The Program will not support loans for home modifications to rental units or rented mobile homes.

Policy Number LOANS-7

Payment Procedure

Effective Date:      October 24, 2001

When OkAT guarantees a loan they will require BancFirst to issue the check to the vendor.  As a condition of the guaranty loan approval, an applicant must agree to an automatic deduction for the monthly payment from their checking and or savings account.

Policy Number LOANS-8

Extension of Credit

Effective Date:      October 22, 2003

When OkAT approves a loan guarantee, the applicant must close the loan with the participating financial institution within ninety (90) calendar days of the date of approval; this requirement may be adjusted if the applicant is utilizing coordinating public funds for partial payment of the assistive technology or computers and other adaptive equipment.  Applicants who have not closed their loan within the ninety-day period may be required to re-apply to BancFirst for approval.

Policy Number LOANS-9

Loans for Re-Financing

Effective Date:      October 22, 2003

OkAT does not make loans for the purpose of re-financing an existing loan.  OkAT is to make loans to individuals who will "acquire" assistive technology or computers and other adaptive equipment.  Thus, an individual must be applying to BancFirst of Stillwater for a loan in order to acquire assistive technology or computers and other adaptive equipment in order to be eligible for a guaranteed loan. 

Policy Number LOANS-10

PastDue Loans

Effective Date:      December 20, 2005

The Loan Coordinator will contact borrowers having OkAT guaranteed loans that are 15 to 30 days past due.  The Loan Coordinator will determine the nature of the financial problem as well as the borrower's intentions.  Guaranteed loans will be brought current through utilization of a rescue payment for a three month period.  At the sole discretion of the Board, the note may be restructured to assist and assure repayment.  Failure to provide OkAT with a satisfactory plan to become current or a request for a term adjustment may result in the OkAT purchasing the note, demanding payment and/or seeking all legal means available for repayment. 

Policy Number LOANS-11

Collections

Effective Date:      December 20, 2005

The OkAT Board has discretion to pursue loan collections when the customer has not made loan payments according to their agreement.

When an OkAT guaranteed loan borrower is past due without an acceptable plan to become current and/or has not requested a modification of the term agreement due to acceptable reasons, the Loan Coordinator will send out a series of collections letters.  No response, or an unsatisfactory response, from the borrower for 90 days is a default of the OkAT agreement.  Upon default, the Loan Coordinator will report negative credit experience of the borrower to a collection agency and begin procedure under Past Due Loan under Policy Number LOANS 10.

Reasons that the OkAT may view as acceptable reason for non-payment include, but are not limited to:

• Medical/physical change
• Compounding disability
• Change in employment status
• Injury on the job
• Family expenses that were unexpected.

With an acceptable reason for non-payment, the Board will consider what it could do to help.  Options may include the following:

• Consumer counseling
• OkAT will make the missed loan payment and seek reimbursement from the loan customer.
• OkAT and the loan customer will arrange to share in the cost of loan payments on a temporary basis.  OkAT will seek reimbursement from the loan customer.
• OkAT will pay default loan in full.  OkAT will seek reimbursement from the loan customer.
• Modify loan term and conditions.

OkAT will demonstrate a process of reasonable and timely interventions with the intent of keeping the loan active.  Should the Board believe that repayment is not possible and the reasons are seen as acceptable, the Board may vote to discharge the debt.

OkAT may turn the past due loan over for external collections and seek all legal means available for repayment..

Policy Number LOANS-12

Repossessions

Effective Date:      December 20, 2005

The Loan Coordinator along with BancFirst will evaluate delinquent auto loans for potential repossession once the account is 90 days past due, or earlier, if voluntary or payment viability is deemed unlikely and the potential realized value of the sale exceeds the cost of repossession.  If the repossession is voluntary, OkAT will make arrangements to take possession of the vehicle.  OkAT will also make arrangements to sell the vehicle for fair market value and have the proceeds of the sale go towards the pay-off of the note.  If the borrower does not agree to arrange for transfer of vehicle and its title, OkAT will stop making rescue payments and borrower is in default with OkAT.  BancFirst will seek payments for an additional 60 days.  If borrower fails to pay, then BancFirst will repossess the vehicle from the owner, sell the vehicle and apply proceeds (less cost of repossession) to the pay-off of the note by OkAT.  OkAT may choose to pay-off the loan to BancFirst without repossession.  Factors to consider include: 

•        diligent collection activity in accordance with OkAT policy and procedure,

•        potential value of the repossession and liquidation sale compared to the expense incurred to OkAT, and

•        reasons for non-payment warrant an exception for loan modifications or debt forgiveness.

Policy Number ALTERNATIVE FINANCING PROGRAM -1

Purpose

Effective Date:      February 3, 2004

The Purpose of the Alternative Financing Program (AFP) is to maximize independence and participation in society by Oklahomans with disabilities so they may purchase the assistive technology they need.  Individuals with disabilities, and their family members, may purchase the assistive technology devices and services.  The individual with the disability maintains possession of the device.

Policy Number ALTERNATIVE FINANCING PROGRAM -2