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MS 5470

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Volume 2 - Supplemental Nutrition Assistance Program (SNAP) MS 5470 - R. 10/1/14 – OMTL - 475 Allowable Shelter Deductions

Allow shelter expenses as billed or otherwise become due. Shelter expenses include rent or mortgage, electricity, fuel oil, coal, telephone, sewer, gas (natural or propane), wood, water, and garbage. If a household is billed for mortgage, rent, or utilities, the amount is an allowable deduction regardless of whether it is paid in advance. During the interview, ask the household how much they pay out-of-pocket for the stated expense.

Shelter expenses must be verified at application and when a household reports a change in their physical address or a change in shelter expenses. Accept any form of verification of shelter expenses that the client provides, such as a mortgage contract or coupon, receipt, utility bill, or collateral contact (CC). If a CC is used, contact with the service provider is the primary source of verification. For example: If an individual is paying rent, the landlord is the provider of the service and should therefore be the verifier of the rent. The primary source of verification should always be considered first before exploring alternate sources. Refer to MS 7050 for acceptable sources of verification. If a mortgage coupon is provided that does not break down the principal, interest, taxes, and insurance, enter the entire amount as the mortgage deduction. Client statement is an acceptable source of verification only at recertification and only if the stated amount has not changed and if their physical address has not changed.

A payment made by a third party as a vendor payment (see MS 5400) is not an allowable deduction.

A. Rent, mortgage or other continuing charges in order for the household to occupy a given shelter or leading to ownership of shelter, including condominium association fees. Enter these fees in the rent/mortgage field as part of the total costs of those expenses. Allow only the following mortgage- related expenses:

1. Allow the principal and interest charged for mortgages. For home equity loans, allow only the minimum amount due.

2. Allow the deduction for an open-ended mortgage that is for, and secured by, the property wherein the household resides. Average the amount of the entire principal and interest over the certification period wherein the note becomes due.

Example: During the January recertification, the principal and interest total $4200 per year and the payment comes due in April. Divide the total by 12 and enter $350 as the monthly mortgage amount.

3. Some lending institutions initiate "on demand" mortgage contracts, which read as though the entire amount of the loan is due upon demand. If no other arrangements are made between the customer and the lending institution, consider these as open-ended mortgages as described above.