The loan agreement must include a plan or schedule for repayment, and the borrower's
express intent to repay the loan:
by selling or transferring real or personal property; or
with current income or anticipated income.
IMPORTANT: Anticipated income such as Title II, Title XVI, Veterans benefits, etc., may be used
to establish a plan for a feasible repayment of the loan. To determine a feasible
repayment loan, see SI 00835.482B.5. (in this section).
CAUTION: Transferring real or personal property for less than its fair market value can cause
a period of ineligibility for SSI. For determining the fair market value, see SI 01150.005.
Consider the following factors when preparing or evaluating a repayment plan or schedule:
Plan should state amount borrowed and repayment terms
The repayment plan or schedule should state the value of the food or shelter, or both,
that is being borrowed and the terms of repayment (e.g., how much will be repaid per
week or per month, etc.). For a loan of ISM, the value of “shelter” is based on the
household expenses listed in SI 00835.465.
The lender (usually the householder) who is providing the food and shelter determines
the value of the food or shelter provided. If the lender alleges a monthly dollar
value, this is the amount that is borrowed each month. If the loan does not cover
the full pro rata share, the individual may be receiving countable ISM for the difference.
Pro rata share basis for loan amount
If the lender does not allege a monthly loan amount but the CR has computed the borrower's
pro rata share of the household expenses, the computed pro rata share is the amount
that is borrowed each month as long as the lender agrees.
EXAMPLE: Borrower’s pro rata share basis for loan amount
Ms. Jones lives in the household of Ms. Smith. Ms. Jones states that Ms. Smith provides
her with food and shelter under a loan agreement. Ms. Smith is unable to estimate
the value of the food and shelter she provides. The CR computes that Ms. Jones' pro
rata share of household expenses is $200 per month. Ms. Smith agrees that this amount
is reasonable, so the CR determines that $200 is the monthly value of the ISM loan.
Pro rata share not computed
If the lender does not allege a monthly loan amount and the pro rata share has not
been computed, the loan agreement can be bona fide if it stipulates that the borrower
is required to repay an amount equal to the pro rata share of household expenses for
the period covered by the loan.
If the lender is outside the household and makes a third party vendor payment for
food or shelter, the loan amount is the amount of repayment agreed upon by the lender
and borrower. The loan amount could be equal to the full amount of the vendor payment
or the individual's pro rata share of that amount. If the loan covers several months,
the loan amount would be the total of the vendor payments for those months.
EXAMPLE: Lender outside the household
If the outside lender pays $150 toward a utility bill, the loan amount is $150, if
the borrower agreed to repay the entire $150. However, if the loan stipulates that
the eligible individual is only responsible for his or her pro rata share of the utility
bill and there are two persons in the household, the eligible individual's loan agreement
is to repay $75 to the lender.