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1240 (07/2026) Chapter 8: Examples • Chapter 8: Examples Example 3: Harry’s home (from above) has an equity value of $75,000. 6% of $75,000 is $4,500. Harry receives $4,800 ($400 x 12) in countable income each year from renting out the house. Since the countable income ($4,800) is more than 6% of the equity value of the house ($4,500), $6,000 of the equity value can be excluded. This means that $69,000 ($75,000 - $6,000) is counted as a resource. Lodger income OSIPM Individual is sole owner of home and pays utilities. One room is rented. Example 1: Frank owns his own home and pays $1000 each month towards mortgage and other fees. Of this $1000, $700 goes to principal, $50 to interest, $150 to property taxes and $100 to real estate insurance. The interest, property taxes, and real estate insurance are allowable expenses; the principal is not allowable. Frank also provided verification that utilities on the home are $350 a month. This brings Frank’s total allowable expenses to $650. Frank rents a single room in the home to Carl for $400 a month. The home has 3 bedrooms, 1 bathroom, 1 living room and 1 kitchen. That makes 5 rooms in total (the bathroom is excluded). Prorate this by dividing the allowable monthly expense of $650 by the number of livable rooms, 5. This gives you the prorated lodger expense of $130. Subtract this prorated expense of $130 from the monthly lodger rental income of $400 to get the reduced lodger income of $270. This is the countable lodger income amount. Calculation: Monthly mortgage payment is $1000. $700 principal, $50 interest, $150 property taxes, $100 real estate insurance. Owner pays all utilities, verified to be $350. The utilities, taxes and insurance are allowable expenses; the principal is not allowable. This brings the total allowable housing expense to $650 ($350 + $50 + $150 + $100 = $650) Home: 3 bed, 1 bath, 1 living room and 1 kitchen. The garage is not a livable space. There are 5 total rooms (3 bedrooms + 1 living room + 1 kitchen) (bathroom and garage excluded) and 1 room is being rented for $400. $650/5 = $130.00 Allowable housing expense divided by number of livable rooms = prorated Lodger reduction $400 - $130.00 = $270.00 Lodger income minus prorated Lodger reduction = Adjusted Lodger income