Oh, right, right. I guess it's kind of a dumb question, but is the same with a bad financial situation, like a default, isn't?
You're right. An unstable financial condition like a default would disable you to get any federal aid, so you would need to get rid of that default before you can receive federal funds.
And that would apply for something even more rash, like a property subject to a judgement lien?
Do you have such a situation active?