Effective Date: November 1, 2021

No Previous Policy

Proceeds from a bona fide loan agreement that the individual is expected to repay. However, if the person lending the money receives interest, the interest received is income.

1. For Educational Loans see 415-6.

2. Reverse equity mortgages . Reverse equity mortgages are loans to the homeowner. The monies received are not income in the month of receipt. Under reverse equity mortgages, homeowners may borrow money against the value of their home and receive a lump sum payment, or monthly payments for a certain period of time. The mortgage holder will hold a lien on the property until repayment is made. Repayment can be when: 1) the house is sold; 2) the house is turned over to the mortgage holder; or 3) the owners die and repayment is taken from the settlement of the estate.

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Effective Date: November 1, 2021

Official source

No Previous Policy

Proceeds from a bona fide loan agreement that the individual is expected to repay. However, if the person lending the money receives interest, the interest received is income.

1. For Educational Loans see 415-6.

2. Reverse equity mortgages . Reverse equity mortgages are loans to the homeowner. The monies received are not income in the month of receipt. Under reverse equity mortgages, homeowners may borrow money against the value of their home and receive a lump sum payment, or monthly payments for a certain period of time. The mortgage holder will hold a lien on the property until repayment is made. Repayment can be when: 1) the house is sold; 2) the house is turned over to the mortgage holder; or 3) the owners die and repayment is taken from the settlement of the estate.