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of the 6% net annual income test. $60,000 Equity based on CMV (tax value) - $ 6,000 D $54,000 After deducting $6,000 that could be excluded if the property produced a net annual income of at least 6% of its equity value, $54,000 would still be counted. The a/b is ineligible due to excess resources. Send DHB-5097/SHB-5097S, Request for Information, to offer opportunity to rebut the value. If proof of rebuttal not provided within 12 calendar days, deny or send timely notice of termination. (See I.A.5.) EXAMPLE 2: CMV (tax value) of property $ 70,000 Present Use Value $65,000 Property tax per year $ 300 Insurance per year $ 300 $63,000 Annual interest on $ 3850 Principal amount on mortgage mortgage payment Other operational expenses per month $ 100 Monthly gross rent $ 600 A/b pays all expenses himself. His only other resource is a bank account with a balance of $550. STEP 1 Determine equity value of the property based on the tax value. $70,000 CMV (tax value) - $63,000 Encumbrances (principal of mortgage) $ 7,000 Equity STEP 2 Determine if the a/b is ineligible based on countable resources, regardless of the 6% net annual income test. $ 7,000 Equity based on CMV (tax value) - $6,000 $ 1,000 Equity after deduction of potential $6,000 exclusion +$ 550 Bank account $ 1,550 Total countable resources $1,550 is less than the $2,000 resource limit. If the property produces a net annual income of at least 6% of the equity value (based on the present use value), $6,000 is excluded from the equity (based on the CMV [tax value]) and the a/b can meet the resource requirement. STEP 3: Determine the equity value for the 6% income test. $65,000 Present use value - $63,000 Encumbrance (principal of mortgage) $ 2,000 Equity based on present use value to use in the 6% income test 59