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Title 8: Medicaid Page 126 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Property Earning Six Percent of Equity Property Earning Six Percent of Equity (Cont.) If the net annual return is higher than 6% of the client’s equity in the property, exclude the property if the equity value does not exceed $6,000.

If the client’s equity in the property exceeds $6,000 and the property is earning at least 6% of equity, count only the amount of equity over $6,000 as a resource.

Ms. T owns her home and rents it out for $700 a month. The fair market value of the home is $80,000 and she still owes $50,000 on it. Ms. T’s equity value is $30,000. She files an application for medical assistance. Determine if the property is earning 6% of equity as follows: $700 x 12 = $8,400 net annual return $30,000 x 6% = $1,800 Since Ms. T’s equity amount exceeds $6,000 and the property is earning at least 6% of equity, count only the amount of equity over $6,000 as a resource. $30,000 - $6,000 = $24,000 countable resource value

If a property is not producing 6% of equity due to a client’s illness, exclude the property as a resource for up to 24 months as long as the client plans to resume the business after the illness ends. Property Used for Self-Support 20 CFR 416.1224 Exclude equity in non-income-producing real property that is valued under $6,000 and produces goods and services necessary to the applicant’s or member’s daily living. Liquid resources used for self-support are not excluded. Resource Replacement 20 CFR 416.1232, P. L. 101-508 Exclude cash received for the replacement or repair of an excluded resource. Do not count the cash or the interest earned on the cash for nine months from the date it is received.

If the replacement or repair takes longer because of circumstances beyond the control of the member, exclude the cash for an additional nine-month period. Count it as a resource the first moment of the next month after the second nine-month period expires.