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DEPARTMENT FOR AGING AND REHABILITATIVE SERVICES AUXILIARY GRANT PROGRAM NON-SSI RESOURCE ELIGIBILITY 11/18 CHAPTER E PAGE 18 Multiply the equity value (the actual or the $6000) times 6%. The result is the required rate of return. Example The individual owns a lot valued at $50,000 that he rents to an adjacent landowner to use as a parking lot. The individual has $7,500 equity in the property. To be eligible for the $6000 exclusion the individual must receive at least $360 in rent annually. ($6000 X .06 = $360) 9.4. Rate Of Return Less Than 6% If the property produces less than a 6% return, the exclusion can apply only if: • The lower return is for reasons beyond the individual's control (e.g., crop failure or illness); and • There is a reasonable expectation that the property will again produce a 6% return. Otherwise, none of the EV is excluded under this provision. Example Mr. Patterson owns a mobile home (not his residence) that has a CMV and EV of $3,000. He owns other property that has a CMV and EV of $2,000. The mobile home produces a net annual rental income of $750, and the other property produces less than $50 a year. Since the mobile home produces more than a 6% return ($3000 X 6% = $180), its EV is excluded. Since the other property produces less than a 6% return ($2000 X 6% = $120), its EV is not excluded. 9.4.1. When the tax return shows an earnings rate of less than 6%: • Record the individual's explanation of the earnings decline in the file. • Obtain evidence of prior years' earnings (e.g., tax returns for at least 2 years prior to the current tax year) to determine whether the activity has produced a 6% rate of return before. • When no tax returns are available, use other evidence such as receipts, check registers, invoices, sales slips, bank statements, etc. 9.4.2. Time Limit For Resumption Of 6% Return