TN 7 (03-99)

SI 01140.042 Determining Equity Value

A. Operating policy

Develop the equity value of a resource (liquid or nonliquid) when an individual alleges a debt against it and the difference between equity and CMV could mean the difference between eligibility and ineligibility.

B. Procedure

1. Obtain a Statement

If an individual alleges a debt against the resource in question, obtain his/ her signed description of the debt.

2. Verification

  1. a. 

    Verify, at a minimum:

    • the outstanding principal balance as of the first moment of any month for which a determination must be made; and

    • the rate of interest and the schedule and amount of payments (to permit the projection of increases in equity).

  2. b. 

    Obtain a copy of the agreement or note that establishes the debt. If this does not provide all the information needed, you may use other records of the individual, the creditor, or both.

3. Resources Still Exceed Limit

If resources exceed the limit despite use of the verified equity value, input RE60 in the CG field to indicate excess equity value. However, before denying or suspending eligibility, consider the possibility of:

4. Equity Value Permits Eligibility

  1. a. 

    RE99 Input and RT Diary

    Transmit code RE99 to the CG field of the SSR. In addition, set an RT diary if:

    • use of CMV instead of equity value would cause resources to exceed the limit; and

    • scheduled payments against the debt are likely to increase equity to a point where resources would exceed the limit before the next scheduled redetermination.

  2. b. 

    Diary Action

    When the RT diary matures, develop the resources for which the diary was set. Make only a current equity value determination; it is not necessary to conduct a complete redetermination.

NOTE:  The presence of code RE99 in the CG fieldalways  requires an equity value determination during an FO redetermination of any kind.

C. Example:

The Rounds, an aged couple, file for SSI in 1/90. Their countable liquid resources total $1,500. They also own nonhome real property with a CMV of $2,000, which would cause their total resources to exceed the $3,000 limit.

However, there is a mortgage on the land with an outstanding principal balance of $800. Thus, the property's equity value ($1,200) currently permits eligibility.

Payments on the mortgage reduce the outstanding principal balance by $80 a month. At that rate, the property's equity value will reach $1,520 in 5/90, and resources will exceed the limit.

The FO makes the following CG field input: RE99, REAL, PROP, 2000, 1200, 0590. It also establishes a diary to recontact the couple in May.

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SI 01140.042 - Determining Equity Value - 03/01/1999
Batch run: 10/10/2014