TN 76 (12-14)

SI 00835.115 In-Kind Support and Maintenance Evaluation for Homes in Foreclosure

A. Background for evaluating in-kind support and maintenance (ISM) for homes in foreclosure

Foreclosure is a process through which the lender or mortgagee seeks to regain property, because the borrower has defaulted on payments. Due to economic conditions, home foreclosures are affecting many people across the country. A foreclosure indicates a possible change in living arrangements (LA). The Social Security Administration is responsible for developing and documenting living arrangement (LA) changes and evaluating if ISM exists on a month-to-month basis.

B. Purpose for developing ISM when a foreclosure takes place

We consider as ISM the receipt of food, shelter, or both, and count the value as unearned income that we use to determine Supplemental Security Income (SSI) eligibility and payment amount. Therefore, when an individual reports a change in their LA, we evaluate whether he or she receives ISM.

NOTE: Refer to “Resource Evaluation for Real Property in Foreclosure” in section SI 01130.120, for development and documentation instructions regarding the resource treatment of homes in foreclosure.

C. Treatment of LA and ISM in foreclosure situations

When an eligible individual, or a member of the eligible individual’s household, alleges that the real property is in foreclosure (or heading towards foreclosure) proceed to evaluate each case accordingly.

1. Claimant’s LA basis as the homeowner

While a foreclosure is pending and the claimant continues to live in the home, the LA basis continues to be home ownership, as described in “When Home Ownership is the Living Arrangement (LA) Basis, in section SI 00835.110.” For purposes of determining ISM, assume that the claimant:

  • retains an ownership interest in the home; and

  • has responsibility to pay the mortgage until the foreclosure is final.

NOTE: Develop LA and ISM following the normal rules for sequential development of LA in SI 00835.001.

After the foreclosure is final, the claimant no longer has an ownership interest in the home. At that time, develop the claimant’s new LA.

2. Treatment of ISM if the homeowner is delinquent on the mortgage payments

Do not charge ISM due to nonpayment of the mortgage for the period that the claimant was in arrears on the mortgage payment because the obligation to pay is still applicable.

EXAMPLE: Mr. Smith is applying for SSI and tells us that he has a monthly mortgage payment of $500.00 and that he has not paid it since March 2012. Foreclosure has not occurred, so he still has a legal obligation to pay the mortgage and no one has paid the mortgage for him. ISM would not apply in this situation because nobody is paying the mortgage payments for Mr. Smith and he still has a legal obligation to make payments on the mortgage. Therefore, the unpaid mortgage payments do not result in ISM for Mr. Smith.

3. Treatment of ISM after the foreclosure has taken place and the claimant is still residing in the home

When a foreclosure is final, the occupant is usually given a period of time to exit the residence. The claimant is no longer required to pay the mortgage payments and is given a date by the court or mortgage company to exit the home. During this period, the mortgage company might not require any payment (rent) for use of the home. Do not charge ISM for use of the house during this period if the mortgage company does not require a payment.

D. Document home ownership and foreclosure when the claimant resides in the home

Accept and document the claimant’s allegation of home ownership (principal place of residence) and foreclosure on a report of contact (DROC) screen or paper Form SSA-5002 (Report of Contact) without additional development unless the case facts are conflicting or otherwise raise a question about home ownership or foreclosure.

1. Document homeownership

If the case facts raise a question about home ownership or the claimant’s allegation is inconsistent with information in the file:

  1. Verify the home ownership allegation following the instructions in SI 01130.100;

  2. Document the claimant’s allegation and the determination about homeownership on a DROC screen or a paper Form SSA-5002; and fax paper docum