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Aged, Blind and Disabled Manual Policy Manual Number: 110.050 Section: Financial Eligibility Requirements Chapter: ABD Countable and Excluded Resources

September 1, 2026 Division of TennCare 18 no longer resides on the property, the balance of the borrowed funds is due and payable. After the amount received is repaid, any additional equity in the property belongs to the owners or their beneficiaries.

When an individual has money in a reverse mortgage line of credit, this money does not count as a loan, or as income or a resource for determining TennCare Medicaid eligibility. If the individual transfers the money to an investment or to a bank account, the amount transferred will become a countable resource.

In order to qualify for a reverse mortgage, an individual must be at least age 62 and the property must be the borrower’s primary residence.

When money is received from a reverse mortgage:

• The money withdrawn is tax-free and can be used for any purpose; • The money can be received as a lump sum, line of credit, a monthly payment or any combination of the 3; • There are no mandatory monthly repayments and the loan can be repaid anytime without penalty;

• The title of the home does not change; and • The lender sets the maximum loan amount.

5. Transfer of Asset Provisions

The purchase of a contract for deed or mortgage is subject to transfer of asset policy for Institutional Medicaid individuals. Funds used to purchase a mortgage on or after February 8, 2006 must meet the following conditions:

• The repayment terms must be actuarially sound; • Payments must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments; and