Rule 23-103-3.4 - Treatment of Loans, Promissory Notes & Property Agreements (SSI)A. SSI policy when the individual is the seller or creditor:1. Obtain a copy of the agreement and assume, absent evidence to the contrary, that the written agreement is bona fide and negotiable.2. A bona fide, negotiable agreement is a resource. The goods or money represented in the agreement are not a resource because they are not accessible.3. The debtor's payments against the principal are a conversion of a resource, not income.4. The interest portion received by the lender is unearned income.5. If retained, principal and interest are counted as the lenders resource the month following the month of receipt. a) Example: Debtor pays $500 per month - $350 toward principal and $150 in interest. The $350 is a converted resource. The $150 is unearned income.6. If including the original principal balance (the amount owed to the creditor when the agreement was established) causes ineligibility on resources, obtain verification of the outstanding principal balance, i.e., the balance in the month for which a determination is being made.7. If including the outstanding principal balance causes ineligibility on resources use the outstanding principal balance in determining resources unless one of the following is submitted:a) Evidence of a legal bar to the sale of the agreement ; orb) An estimate from a knowledgeable source (in the business of making estimates, such as banks, other financial institutions, private investors, real estate brokers, etc.) showing that the CMV of the agreement is less than its outstanding principal balance. 1) The estimate must show name, title, and address of the source.8. For agreements determined to be Non-Bona Fide or Non-Negotiable: a) A non-bona fide or non-negotiable agreement is not a resource under SSI policy;b) The principal and interest paid to the lender are income, not a resource ; and c) The goods or money represented in the agreement may be a resource to the seller if the seller/creditor has access for his own use23 Miss. Code. R. 103-3.4
Social Security Act §1902 (r) (2); 42 CFR §435.601(b) (Rev 1994).