Determining Repayable Aid from Sale of Excess Real Property

[EAS 42-213.12]

Any aid paid during the nine-month period or until the property is sold, whichever comes first, is considered repayable when the property is sold. The repayment amount is collected from the “net proceeds” of the sale of the property.

Rule #1

The “net proceeds” of the sale is determined by subtracting the COSTS OF THE SALE from the gross amount of the sale. The costs directly related to the sale of the property is determined by the EW and may include:

  • Loans and liens of the seller, other than the lien granted to the county, that are secured by the property.
  • Title insurance fees paid by the seller.
  • Broker's fees paid by the seller.
  • Prepaid interest or loan processing fees (points) paid by the seller.
  • Appraisal fees paid by the seller.
  • Fees paid by the seller to advertise the property, i.e., newspaper ads and “For Sale” signs.

Rule #2

If the “net proceeds” from the sale plus the value of other non-exempt real and personal property at the BEGINNING OF THE (9) MONTH EXEMPT PERIOD is less than the property limit for the AU, there is no repayable aid.

Example:

At the beginning of the exempt period, the AU had $300 in savings and a parcel of land that was exempt for nine months. The property was sold for $8000. Loans and liens, except for the lien granted to the county, equaled $6000. Costs directly related to the sale were $1400.

  $8000    Gross amount of sale
–  6000    Loans and liens (not including this county lien)
–  1400    Costs of sale
    $600    Net proceeds of the sale
+    300    Total value of all other countable resources at the BEGINNING of the exempt period.
    $900    

Nine hundred dollars ($900) is less than the property limit for the AU. Therefore, there is NO repayable aid.

Rule #3

If the “net proceeds” from the sale plus the value of other non-exempt real and personal property at the BEGINNING OF THE NINE-MONTH EXEMPT PERIOD EXCEED the property limit for the AU, the amount repayable is the amount of the “net proceeds” or the amount of aid paid during the exempt period, whichever is less.

Example:

At the beginning of the exempt period, the AU owned an unoccupied house. They had no other real or personal property. The house sold for $529,000. Aid paid during the exempt period was $3960. Net proceeds were $3000.

   $529,000     Gross proceeds
–   520,000      Loans and liens (not including this county lien)
–       6,000      Costs of sale
       $3,000      Net proceeds of sale
                0       Total value of all other countable resources at the beginning of the exempt period.
      $3,000    

As $3000 is the “net proceeds” and is less than $3960 (the amount of aid paid during the exempt period) then $3000 is the amount to be repaid.

Related Topics

General

Excluded Real Property

Other Excluded Real Property

Excess Real Property Exclusion

Special Property Considerations