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Title 8: Medicaid Page 118 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Mortgages and Contracts Mortgages and Contracts 20 CFR 416.1201 Count mortgages and contracts as resources. The countable value of a mortgage or contract is:  The remaining balance on the contract; or  The gross price for which it can be sold or discounted on the open market minus any legal debts, claims, or liens against the property.

Offer the applicant or member the opportunity to:  Show that a contract is not legally transferable; or  Establish the fair market value of the contract.

The fair market value of a mortgage or contract is the amount that the buyer would pay the seller for the mortgage or contract. To establish the fair market value of the contract, tell the applicant or member to obtain three written estimates of the mortgage or contract value.

Inform the applicant or member that obtaining outside estimates of the market value could increase or decrease the countable value of the resource. The institutions from which the estimates are obtained do not need to be in the area where the property is located.

The fair market value must be determined as the contract or mortgage stands, without any modification or conditions. However, the following conditions to a valuation are acceptable and do not prevent it from being a bona fide estimate of fair market value:

 Establishment of ownership.  Production of abstract.  Payment of filing fees. Deduct filing fees from the value of the contract.

Average the estimates provided by the applicant or member. If you receive only one unbiased estimate, use that value.