Itchy spots and hair loss?

Hello, somewhat recently my dog started getting itchy red spots on his back, butt, belly and feet. (I don't see anything wrong with his face, neck or shoulder area)

I noticed about two months ago that after his bath and flea spray he got red bumps. I thought that maybe it was an allergic reaction to the spray or flea bites, well the bumps haven't gone away, he smells pretty gross, and we shaved him down to lower the hair all over our furniture (German shepherd Aussie mix) and we realized his butt was bare naked from hair loss after we cut the long fur off. There were lots of red dots and a few scabs too. I started putting a coconut oil with tea tree oil on his back thinking it may just be an infection from bites or just agitated from his constant scratching. It did seem to clear up the hair loss and scabs but he's still itchy. (I bought topical flea drops from petsmart with good reviews and put this on him about a week before I noticed the scabs // and his legs have small sores on them that I clean daily, they are looking better though now)

It may have been a reaction to the drops maybe? I read up on it and found that aussies often have wheat allergies, so I got him grain free dog food to see if that helps clear it up, but any other ideas?

(I just moved here like 2 weeks ago and I haven't gotten my dog license, his shots are unknown, and I need to work for a few weeks before I can afford the vet, especially if I'm buying the expensive dog food) so I want to try to do it as natural as I can, because face it, vets are extremely expensive and I already have a few human antibiotics I could use if it was an infection, but it's mostly cleared up by now other than the itching and red spots.

Thanks