REAL PROPERTY SR 13-36, 11/13 (MAM-A)

Real estate in the form of land or buildings. The treatment of real property varies depending on the type of property it is.

Determining Real Property Resource Value

The various types of real property are listed below with the appropriate treatment:

• HOME

 Real property consisting of the house or mobile home and any adjoining land or buildings necessary to its maintenance that are owned and occupied as the residence of the assistance group. A vehicle used as an assistance group’s home is treated as a home rather than a vehicle.

 Treatment: Excluded Resource

 Exceptions:

• For individuals applying for or receiving HCBC services or nursing facility care, homes placed into trusts established after 8/10/93, including irrevocable trusts, in which the individual or the institutionalized individual’s spouse:

- is a beneficiary of the trust, are a countable resource. See TRUSTS USING THE ASSETS OF THE INDIVIDUAL OR SPOUSE.

- is not a beneficiary of the trust, must be evaluated as an asset transfer for the adult categories of assistance.

• Although the home is an excluded resource, individuals whose equity interest in their home exceeds $536,000 are ineligible for NF/HCBC services unless their spouse, child under 21, or child who is blind or disabled is lawfully residing in the home.

- The equity interest of the home is the current market value of the home minus any encumbrance. An encumbrance is a legally binding debt against the resource. This can be a mortgage, reverse mortgage, home equity loan, or other debt that is secured by the home.

- For jointly owned property, the fractional interest held by the applicant or recipient of long-term care services minus any encumbrances cannot exceed $536,000.

- See Section 415.29, Undue Hardship, for information on the hardship waiver process.

• INCOME-PRODUCING PROPERTY

 Real property not occupied by the assistance group but producing income at least sufficient to meet the expenses of its ownership and maintenance.

 Treatment: Excluded Resource for the adult categories of assistance

 Countable Resource for the FANF and FANF-related categories of assistance. If the individual is over resources, allow the individual to dispose of the property in accordance with the disposal policy below.

• JOINTLY OWNED REAL PROPERTY

 Real property which is owned jointly with a non-assistance group member. If the terms of ownership prevent unilateral sale or disposition and the other owner(s) refuse(s) to sell the property, consider the property an inaccessible resource.

 Treatment: Excluded Resource

 Jointly owned real property that does not meet the above criteria is considered accessible.

 Treatment: Countable resource. If the individual is over resources, allow the individual to dispose of the property in accordance with the disposal policy.

 Exception: The addition of a joint owner to an asset must be evaluated as an asset transfer. See PART 415, TRANSFER OF ASSETS.

• REAL PROPERTY NECESSARY AS A RESIDENCE for the individual’s:

- spouse; or

- child who is either a minor, blind, or disabled.

 Treatment: Excluded Resource

• UNOCCUPIED REAL PROPERTY

 The home temporarily unoccupied by all members of the assistance group due to temporary absence, such as an illness requiring temporary hospitalization or institutionalization.

 Treatment: Excluded Resource

 The home permanently unoccupied by the assistance group due to permanent hospitalization or institutionalization or any other unoccupied real property that is not:

- income-producing;

- necessary as a residence for the individual’s spouse or child who is either a minor, blind, or disabled; or

- considered an inaccessible resource due to the terms of joint ownership.

 Treatment: Countable Resource. If the individual is over resources, allow the individual to dispose of the property in accordance with the disposal policy.

• VACATION PROPERTY

 A home used part of the year that does not produce income consistent with its fair market value.

 Treatment: Count the equity value. If the individual is over resources, allow the individual to dispose of the property in accordance with the disposal policy.

PROVISIONAL ASSISTANCE DURING DISPOSAL OF REAL PROPERTY

Individuals over the resource limit because of countable real property may receive provisional assistance if he or she tries to dispose of the countable real property in excess of limits. Allow an individual to dispose of, or take action to dispose of, countable real property if the equity value of the property alone or in combination with other countable resources exceeds the resource limit. The property is not counted as a resource during the disposal period. The individual – not DHHS – is responsible for disposing of real property.

Individuals whose eligibility is denied or terminated because of excess resources must verify how the resources were spent before assistance can be granted.

Provisional assistance requires that the individual dispose of real property. Use the following steps.

1. Notify the individual to dispose of the property within 6 months of the date of notification. Good faith means the individual must genuinely attempt to sell the property and cannot refuse a reasonable offer.

2. Deny or terminate assistance if the individual refuses to dispose of, or take action to dispose of, the property within 6 months.

3. Exclude the equity value of the property during the disposal period.

4. Follow up before the end of the six-month disposal period to determine if the property has been sold. Property counts as of the first day of the seventh month unless an extension has been granted.

- If the property has not been sold and the individual can demonstrate valid reasons for his or her inability to sell the property, the District Office Supervisor can extend the period for another 3 months.

- If the individual cannot demonstrate a good faith effort to sell the property, do not allow an extension period. Count the equity value of the property as a countable resource.

5. When the property is sold, count the net proceeds from the sale of the property as a lump sum resource.