Alternative Financing Programs (AFPs)

Submitted By:  Jackie Wilks-Weathers, Executive Director
The Center for Financial Independence & Innovation
Contributing Authors:  Carol Fury, Marilyn Hammond, Patti Kraemer, Patti Lind, Frances Pennell, Susan Tachau and Joey Wallace

The federal Technology-Related Assistance for Individuals with Disabilities Act of 1988 authorized Alternative Financing Programs under Title III, “…to award grants to states to establish and administer the expansion and administration of an alternative financing program…to allow individuals with disabilities and their family members…to purchase assistive technology devices and assistive technology services…”  This program was reauthorized in 1994 and 1998.

Most Common Purchases:

• adapted vehicles
  
• ramps
• roll-in showers and other home modifications
  
• hearing aids
  
• computers
  
• low-vision aids
  
• wheelchairs and scooters

What is assistive technology?   An assistive technology (AT) device is "any item, piece of equipment, or product system, whether acquired commercially, modified, or customized, that is used to increase, maintain, or improve functional capabilities of individuals with disabilities" (P.L. 108-364).  Assistive technology services are "services that directly assist an individual with a disability in the selection, acquisition, or use of an assistive technology device" (P.L. 108-364).

Why is assistive technology (AT) important?  AT devices help people with disabilities live in their own homes, be active members of their communities, attend school and engage in competitive employment.  AT helps keep people out of institutions and saves millions of dollars in Medicaid spending. 

What is an Alternative Financing Program (AFP)?  AFPs provide people with disabilities and their families with any combination of the following:

• Cash loans for AT that are below market rates - many of these loans are guaranteed (i.e., back by the program) using more flexible underwriting criteria.
• Loans that have extended repayment periods resulting in more affordable monthly payments
• Financial education
• Information about other possible funding resources

• AFPs boast an average repayment rate of 97%

• Assistance with loan repayment, if necessary
• One-on-one personal assistance throughout the loan period

Success at a Glance:

• As of 2007, AFPs closed 6,379 loans totaling $70,822,636
• Leveraged significant state, regional and private funds

Who are AFPs?   AFPs are run either by non-profit organizations or state agencies.  These organizations have successfully embedded their services in their respective states by providing people with disabilities with flexible financing, facilitating their growth in financial literacy, and in building relationships with local banks and credit unions.

Who benefits from AFPs?  Americans with disabilities benefit.  Funding for equipment and home modifications is a major obstacle for many people with disabilities.  The equipment people need in order to be independent is often not covered by insurance or any other public resource.  Additionally, traditional lending institutions are unwilling to provide credit to individuals with poor or no credit history.  Low-cost loans through an AFP are often the only option available to an individual with a disability.

In Georgia, Consumers SAVE money with Credit-Able Loans:

Credit-Able Financing
$2,000
5.4%
3 year term
Monthly payment = $60.30
Total interest paid = $170.86

Traditional Financing
$2,000

Total interest saved: $578.85

Consumer Story

Amber Wright is a 20 year-old college student at West Georgia College. Amber has a spinal cord injury and initially tried to get a modified vehicle with the assistance of the Department of Labor/Vocational Rehabilitation program, but her situation fell outside the program’s funding guidelines.  Amber was determined to find a resource to help her become more independent.  She was referred to Credit-Able by the Brain and Spinal Cord Injury Trust Fund Commission and we were able to help her access an affordable loan through the Credit Union of Georgia.

                           Standard               With Credit-Able
Interest Rate           14.0%                         5.0%
Loan Term             60 months                  60 months
Total Cost             $18,964.47                 $15,380.79
Total Savings                                         $3,583.68

"Thank you for the help that you provided through Credit-Able...no longer do I have to stand out in the rain/cold/hot weather while my mother is pulling down the ramp...thank you for putting me one step closer to having an independent life."

                                        - Amber Wright, Credit-Able Consumer

Darlene Wright, Amber’s mother, served on a consumer panel and had this to say about Credit-Able:

I would like to first say thank you to Jackie Wilks-Weathers, Executive Director, The Center for Financial Independence and Innovation and to Daphne Brookings for the invitation to speak today and share a little bit about how the “Credit-Able” program has helped to enhance my life as a caregiver and most especially the life of my daughter Amber. You see the fate that has brought our two sides together has resulted in a lifelong dream as well as a necessity that has helped put my daughter on her way to independence with the ability to own for the first time a modified van and now be only a  few steps from being totally independent in driving herself.

I read on their website that the “mission of Credit-Able is to make independence affordable for Georgians with disabilities by providing low interest loans and allowing affordable financing”. Today I stand before you and say MISSION ACCOMPLISHED!