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DEPARTMENT FOR AGING AND REHABILITATIVE SERVICES AUXILIARY GRANT PROGRAM NON-SSI INCOME SOURCES 07/19 CHAPTER I, PAGE 50

43.1. Bona Fide Agreement A bona fide agreement is an agreement that is legally valid and made in good faith. A loan (oral or written) is bona fide if it meets all of the following requirements. • Enforceable Under State Law A bona fide loan is a contract that is enforceable under Virginia law. • Loan Agreement In Effect At Time Of Transaction The loan agreement must be established and in effect at the time that the cash proceeds are provided to the borrower. Money given to an individual with no obligation to repay cannot become a loan at a later date. • Acknowledgement Of An Obligation To Repay The obligation to repay must be acknowledged by both the lender and the borrower for a bona fide loan to exist. When money or property is given and accepted based on any understanding other than it is to be repaid by the receiver, there is no loan for AG purposes. A statement by the individual that he or she feels personally responsible to pay back the friend or relative does not create a legal obligation to repay the individual who provided the cash. Similarly, a statement by the lender that the eligible individual is only required to repay the cash if he or she becomes financially able to do so does not create a legal obligation to repay. • Plan For Repayment The loan must include a plan or schedule for repayment, and the borrower’s express intent to repay by pledging real or personal property or anticipated future income (such as AG benefits). • Repayment Plan Must Be Feasible The plan or schedule must be feasible. In determining the plan’s feasibility, consider the amount of the loan, the individual’s resources and income (including anticipated AG benefits), and the individual’s living expenses.