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Eligibility workers must keep in mind that equity value will increase with each monthly loan payment. Also, the fair market value may decrease whenever the publication used to establish the value is published. For those recipients who are very close to the resource limit, the value of nonexempt vehicles may have to be verified monthly to ensure that the recipient does not have excess resources as of the first day of a month. 2605.25.10 REAL PROPERTY VALUE

Fair market value is the reasonable price that real property can be expected to sell for on the open market in the geographic area involved. (Refer to 2605.05.00 and 2620.00.00 for definition of real property)

The fair market value (FMV) of real property can be obtained through tax records or from an estimate by a knowledgeable source. When tax records are used, the most recent property tax assessment must be obtained. The fair market value is the assessed value divided by the assessment ratio. The tax assessment cannot be used if: It is more than one year old; It is under appeal; It is based on a fixed rate per acre method; or The taxing authority does not provide an assessment ratio, or only provides a range, for example, between 50% and 75%.

If the eligibility worker questions an estimate from a knowledgeable source, one or more additional estimates are to be obtained and averaged in order to establish the fair market value.

If the lesser value is accepted, it must be entered on Real Property page. The eligibility system calculates the equity based on the worker entered FMV of property, the equity override (EO) field must be answered "Y" to enable the lesser equity to be entered and used by the system in the eligibility determination. 2605.25.10.05

LIFE ESTATE AND REMAINDER VALUE

Life Estate: • A life estate conveys to an individual certain rights in property for his lifetime. The owner of a life estate generally has the right of possession and use of the property, as well as the right to obtain profits from the property and to sell his life estate interest.

Remainder Interest: • When an individual conveys property to one person for life (life estate holder) and to a second person (the remainderman) upon the death of the life estate holder, both a life estate interest and a remainder interest are created in the property. A remainderman cannot sell his interest in the property while the life estate holder is alive unless otherwise specified in the deed. At the death of the life estate holder, the remainderman will hold full title.

The fair market value of a life estate or remainder interest is determined as follows: • Determine the fair market value of the property (Section 2605.25.10) in the usual manner;