REPAYMENT AGREEMENTS ON REAL PROPERTY
ISSUE DATE: 04/2013
MFIP, WB, DWP:
When the value of non-homestead real property combined with other countable assets is over the $5,000 asset limit and the unit signs a DWP/MFIP/WB Repayment Agreement (DHS-2741) and executes a lien against the property, exclude the non-homestead real property. Do not require an applicant unit to sign a repayment agreement when the value of the non-homestead real property combined with other countable assets does not exceed the $5,000 asset limit. The lien will contain an initial unspecified figure to be subsequently determined at the time of sale or when the repayment agreement ends, for the amount of benefits issued during the period the agreement was in force. When the lien has been established, it remains in force until satisfied, even if the case is closed.
Promptly record the lien to ensure priority status over subsequent claims against the property. If the property lies in another state, contact the appropriate county authorities in that state before submitting the lien to them to determine the recording fee and to see if they will honor the lien. Give or send copies to the client and to the clerk of courts in the county where the property is located, and maintain a copy in the case file.
The unit must make a good faith effort to sell the property to continue eligibility. A good faith effort is defined as a sale price and terms which are consistent with local market price and terms for comparable property, plus either:
● | Listing of the property with a realty broker. |
OR | |
● | If sold privately, advertising effort comparable to efforts in the local market area to sell similar property. |
Applicant units must sign the Repayment Agreement and execute the lien during the application process. Participant units must do so as soon as the county agency becomes aware the property causes excess assets.
If the unit sells the property while still receiving MFIP, WB or DWP, certify the lien amount as the recording fee plus the total grant expended during the period of the agreement. For overpayments for months prior to January 2001, subtract the amount of child support used to reimburse the amount of the cash portion issued during that period. See 0025.03 (Determining Incorrect Payment Amounts). A unit can remain eligible for assistance after repayment of the lien, but any proceeds remaining are considered an asset. See 0025 (Benefit Adjustments and Recovery).
If the unit does not sell the property or becomes ineligible for any other reason, close the case. Modify the lien at that point to reflect the filing fee plus the total cash portion issued. For overpayments for months prior to January 2001, subtract the amount of child support used to reimburse the amount of assistance issued during that period. See 0025.03 (Determining Incorrect Payment Amounts). Submit an affidavit of change to the clerk of courts for any adjustments to the lien.
Clients have the option of repaying the amount of the cash portion issued during the period the agreement was in effect. If this occurs, promptly discharge the lien.
If the unit intentionally sells the property below market value, determine the lien amount based on the fair market value of the property when the repayment agreement was signed.
SNAP, GA, GRH, MSA:
No provisions.
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