Texas Health and Human Services Commission
Medicaid for the Elderly and People with Disabilities Handbook
Revision: 14-1
Effective: March 1, 2014

F-3000

Home

The value of a home that is a person's or the person's spouse's principal place of residence is not a resource of the person or the spouse.

A home is a structure in which a person lives (including mobile homes, houseboats and motor homes), other buildings and all adjacent land.

Note: The words home and homestead can be used interchangeably in this section.

A home is a structure in which the person or the person's spouse lives. All land adjacent to the home includes any land separated by roads, rivers or streams. Land is adjacent as long as it is not separated by intervening property owned by another person. This means all the land associated with the home, whether or not there is a business operated in connection with the home or property.

Adjacent property is a part of the home even if there is more than one document of ownership (for example, separate deeds), the home was obtained at a different time from the rest of the land or the holdings are assessed and taxed separately.

Home property may be jointly owned, or ownership may be in the form of a life estate or interest in an intestate estate.

For property to be considered a home for Medicaid eligibility purposes, the person or spouse must consider the property to be their home and:

F-3100  The Home and Resource Exclusions

Revision 10-1; Effective March 1, 2010

An exclusion to the home as a countable resource is possible if the person or spouse has ownership interest in the property and the property currently is the principal place of residence of either the person or the spouse. Exclude the property as a home even if the person leaves the home without the intent to return as long as a spouse or dependent relative of the person continues to live in the property.

If a non-institutionalized person is a victim of domestic abuse and is fleeing from an abusive situation, exclude the property as a home even if the person leaves the home without the intent to return but still maintains an ownership interest in an otherwise excluded home. Continue this exclusion until the non-institutionalized person establishes a new principal place of residence or takes other action rendering the home no longer excludable.

F-3110  Principal Place of Residence

Revision 09-4; Effective December 1, 2009

An exclusion to the home as a countable resource is possible if the person or spouse has ownership interest in the property and the property currently is the principal place of residence of either the person or the spouse. Exclude the property as a home even if the person leaves the home without the intent to return as long as a spouse or dependent relative of the person continues to live in the property.

F-3111  The Home as the Principal Place of Residence

Revision 09-4; Effective December 1, 2009

Only one place may be established as a person's principal place of residence. If the person lives in more than one place or owns more than one residence, the person must designate one as his principal place of residence. If the person is unable to make this decision, HHSC bases the determination on statements from the person's guardian or authorized representative, or on the address the person uses on his or her voter registration, federal benefits or federal income tax returns.

The home can be real or personal property, fixed or mobile, and located on land or water.

The property ceases to be the principal place of residence and, therefore, not excludable as the home as of the date that the person, having left it, does not intend to return to it.

F-3112  Spouse or Dependent Relative Living in the Home

Revision 09-4; Effective December 1, 2009

See also Section F-3500, Out-of-State Home Property.

If a person lives in a long-term care facility and his or her spouse or dependent relative lives in the person's principal place of residence, the home is not considered an available resource.

A relative is a son, daughter, grandson, granddaughter, stepson, stepdaughter, half sister, half brother, grandmother, grandfather, in-laws, mother, father, stepmother, stepfather, aunt, uncle, sister, brother, stepsister, stepbrother, nephew or niece. A dependent relative is one who was living in the person's home before the person's absence and who is unable to support himself/herself outside of the person's home due to medical, social or other reasons.

See Appendix XVI, Documentation and Verification Guide.

F-3120  Intent to Return Home

Revision 13-4; Effective December 1, 2013

An exclusion to the home as a countable resource is possible if the person or spouse has ownership interest in the property, the property was the principal place of residence of either the person or the spouse while having ownership interest, and the person and spouse no longer live there but intend to return to the home.

The primary evidence of intent to return home is the applicant's/recipient's statement, as documented on a signed Form H1245, Statement of Intent to Return Home, or a comparable written statement from the applicant's/recipient's spouse or authorized representative.

F-3121  Intent to Return Policy

Revision 13-4; Effective December 1, 2013

Consider intent to return policy if the person:

  • has ownership interest in the property, and
  • previously resided in the property while having ownership interest.

The primary evidence of intent to return home is the applicant's/recipient's statement, as documented on a signed Form H1245, Statement of Intent to Return Home, or a comparable written statement from the applicant's/recipient's spouse or authorized representative.

The property cannot be excluded as a home with intent to return if the person:

  • has ownership interest in the property, but
  • has not resided in the property while having ownership interest.

Exclude the property as a home even if the person leaves the home without the intent to return, as long as a spouse or dependent relative of the person continues to live in the property.

See Section F-3400, Replacement of the Home; Section F-3500, Out-of-State Home Property; and Section F-3121.1, Temporary Absence from the Home.

F-3121.1  Temporary Absence from the Home

Revision 09-4; Effective December 1, 2009

Absences from home for trips, visits and medical treatment do not affect the home exclusion as long as the person continues to consider the home to be his or her principal place of residence and intends to return home. If a person owns a residence but lives elsewhere, HHSC determines whether the person continues to consider the home to be his/her principal place of residence and whether he/she intends to return.

See Appendix XVI, Documentation and Verification Guide.

F-3130  Home and Other Real Property Placed for Sale

Revision 12-3; Effective September 1, 2012

The value of real property, including a home, life estates and remainder interests in the property, is exempt if the person places the property for sale. The exemption continues until the proceeds of the sale are available to the person.

The value of the resource is not counted until the proceeds of the sale are available. See Section F-1260, Conversion of Resources, for treatment from the proceeds of a sale of a resource. Determination of resources is completed as of 12:01 a.m. on the first day of the month. However, if the person is purchasing a replacement home, the proceeds of the sale of the original home are not countable resources for three full months following the month of receipt.

See Section F-3400, Replacement of the Home.

Note: This policy also applies to out-of-state home property. See Section F-3500, Out-of-State Home Property.

F-3200  The Home and Resources in a Trust

Revision 09-4; Effective December 1, 2009

If the home property is in an irrevocable or revocable trust ("Living Trust"), see Section F-3300, The Home as a Countable Resource.

 

F-3210  Treatment of a Home in a Revocable or Living Trust

Revision 09-4; Effective December 1, 2009

A home placed in a revocable or living trust (or similar type trust) loses the exclusion as a homestead and becomes a countable resource based on trust policy found in Section F-6400, Revocable Trusts.

Note: If the home is in an irrevocable trust, see Section F-6500, Irrevocable Trusts. Seek agency legal evaluation of the trusts and their treatment.

Presume the tax value as the countable value of the property in a revocable trust when making a determination of countable resources. The person has a right to rebut the presumed value and provide verification of the equity value.

Note: The fair market value (FMV) of a resource is the going price for which it can reasonably be expected to sell on the open market in the particular geographic area involved. Equity value (EV) is the FMV of a resource minus any encumbrance on it. An encumbrance is a legally binding debt against a specific property. Such a debt reduces the value of the encumbered property, but does not have to prevent the property owner from transferring ownership (selling) to a third party. However, if the owner of encumbered property does sell it, the creditor will nearly always require debt satisfaction from the proceeds of sale.

If the homestead property is removed from the revocable trust (or the trust is dissolved), the person may be able to re-establish the property as a homestead. Also see Section F-3121.1, Temporary Absence from the Home.

F-3211  Re-established Intent to Return Home

Revision 09-4; Effective December 1, 2009

Intent to return home must be re-established if the homestead property is removed from the revocable trust (or the trust is dissolved). A completed Form H1245, Statement of Intent to Return Home, or the response on the application is used to establish and designate the homestead property.

If the property is designated as homestead property, determine the home equity value of the property and follow policy in Section F-3600, Substantial Home Equity.

If the person takes action to remove the home property from the trust, the medical effective date cannot precede the first of the month after the date the home was officially removed from the trust.

Example: Due to the countable home property in a revocable trust, Mr. Jones has excess resources January of this year and is not eligible. Mr. Jones removes the home from the living trust on March 10 of this year. Mr. Jones re-applies for Medicaid on March 15 of this year. Due to the countable home property in a revocable trust, Mr. Jones has excess resources as of 12:01 a.m. on the first day of January, February and March. The medical effective date can be no earlier than April 1 of this year.

F-3300  The Home as a Countable Resource

Revision 09-4; Effective December 1, 2009

Count the equity value in the reported home property if the home property:

  • does not meet homestead criteria (see Section F-3100, The Home and Resource Exclusions);
  • is in a revocable trust; or
  • meets homestead criteria, but cannot be excluded as a resource based on any of the following exclusion reasons:
    • principal place of residence (see Section F-3111, The Home as the Principal Place of Residence);
    • intent to return home (see Section F-3120, Intent to Return Home); or
    • home is placed for sale (see Section F-3130, Home Placed for Sale)

See also Section F-3500, Out-of-State Home Property.

Note: If the home is in an irrevocable trust, see Section F-6500, Irrevocable Trusts. Follow regional procedures to request assistance from HHSC Legal regarding the terms and conditions of trusts. See Appendix XVI, Documentation and Verification Guide.

F-3400  Replacement of the Home

Revision 12-3; Effective September 1, 2012

If a person is purchasing a replacement home, the proceeds of the sale of the original home are not countable resources for three full months following the month of receipt. For example, if the proceeds were received on Jan. 13, the exclusion period ends April 30. There are no extensions.

Expenses related to selling the original home and purchasing and occupying the replacement home are deducted from the proceeds. Allowable costs for selling the home include broker fees, commissions, legal fees, mortgage-related fees such as "points" paid by the seller, inspection and settlement fees, and transfer and other accrued taxes paid by the seller. Allowable costs for purchase and occupancy of the replacement home do not have to have been paid by the end of the exclusion period, but the person must have obligated himself to pay them. Allowable costs include down payments, settlement costs, loan processing fees and points, moving expenses, costs of necessary repairs or replacements to the replacement home's existing structure or fixtures such as furnace, plumbing and built-in appliances, and mortgage payments on the replacement home for periods before occupancy.

Any proceeds in excess of the cost of replacing and occupying the home are countable resources.

See Section F-3121, Intent to Return Policy.

F-3500  Out-of-State Home Property

Revision 09-4; Effective December 1, 2009

With the following exceptions, a person who applies for and receives Medicaid benefits in Texas is not allowed to exclude a home in another state. Otherwise, if the person considers his home in another state to be his principal place of residence, he is not a Texas resident, and he must apply for assistance in his home state.

If the community spouse lives in another state in a house that the person claims is not his homestead, to determine the protected resource amount and initial eligibility, HHSC excludes the out-of-state property as a part of resources totally excluded regardless of value. If the person still has an ownership interest in the property at the first annual redetermination, HHSC considers the value of the property a countable resource that is real property. This situation does not affect residency requirements. As long as the institutionalized spouse intends to remain in the state where he is institutionalized, he is considered a resident.

If the community spouse lives in another state in a house that is the person's homestead, the home is excluded in the resource assessment and throughout the initial eligibility period of 12 months. If the person still has an ownership interest in the property at the first annual redetermination, the home is a countable resource. If the community spouse is not living in the out-of-state home, the community spouse must sign a statement of intent to return for the home to be excluded for the resource assessment and initial eligibility period of 12 months.

If there is no community spouse, the out-of-state home property is a countable resource unless it is placed for sale. If there is no community spouse, the home is not placed for sale, and the person considers his home in another state to be his principal place of residence, the person is not a Texas resident; he must apply for Medicaid in his home state. If the person does not consider the out-of-state home as his principal place of residence, it is a countable resource.

See Section F-3130, Home Placed for Sale.

F-3600  Substantial Home Equity

Revision 14-1; Effective March 1, 2014

As part of Public Law 109-171, Deficit Reduction Act of 2005 (DRA), a person with a home whose equity interest in the home exceeds the established limit is not eligible for vendor payment in an institution or for §1915(c) waiver services.

Exception: If the person's spouse, child or disabled adult child is living in the home, substantial home equity policy does not apply.

Treatment of a homestead as a resource in Section F-3000, Home, continues, but does not impact the determination of disqualification for vendor payment in an institutional setting or denial of §1915(c) waiver services and services in a state supported living center and a state center due to substantial home equity.

Once eligibility for services in an institutional setting is determined, consider if the equity value of the home disqualifies the person for vendor payment in a Medicaid-certified long-term care facility. When eligibility for §1915(c) waiver services or services in a state supported living center and a state center is requested, consider if the equity value in the home results in denial.

Home Equity Treatment

For a person who is determined eligible for Medicaid in an institutional setting based on an application filed on or after Jan. 1, 2006, the person is not eligible for Medicaid for services in an institutional setting if the person's equity interest in the person's home exceeds $543,000 (this dollar amount is increased, beginning in 2011, from year to year based on the percentage increase in the consumer price index for all urban consumers [all items; United States city average], rounded to the nearest $1,000).

The home equity that exceeds $543,000 does not apply if either of the following is lawfully residing in the person's home:

  • The person's spouse
  • The person's child, if the child is under age 21, or is blind or permanently and totally disabled as defined by SSA

This policy does not prevent a person from using a reverse mortgage or home equity loan to reduce the person's total equity interest in the home.

The secretary of the U.S. Department of Health and Human Services shall establish a process to waive this policy in the case of a demonstrated hardship.

F-3610  Persons Impacted by Substantial Home Equity Disqualification

Revision 14-1; Effective March 1, 2014

Substantial home equity disqualification policy impacts any person in an institutional setting who applies for Medicaid on or after Jan. 1, 2006. Substantial home equity disqualification policy impacts any person who is Medicaid-eligible in the community and requests a program transfer for Medicaid in an institutional setting on or after Jan. 1, 2006. This includes:

  • Applicants — For applications on or after Oct. 1, 2006, consider substantial home equity disqualification policy for the first determination of eligibility and all future redeterminations.
  • Program transfer requests — For program transfer requests from any Medicaid program for Medicaid in an institutional setting on or after Oct. 1, 2006, consider substantial home equity disqualification policy for this determination of eligibility and all future redeterminations.
  • Redeterminations — For redeterminations for Medicaid in an institutional setting on or after Oct. 1, 2006, consider substantial home equity disqualification policy for those who filed an application or had a program transfer request on or after Jan. 1, 2006.
  • Reported changes in homestead status — For reported changes in homestead status on or after Oct. 1, 2006, consider substantial home equity disqualification policy for those who filed an application or made a program transfer request on or after Jan. 1, 2006, for institutional or waiver services.

Notes:

  • Substantial home equity disqualification affects payments for Medicaid-certified long-term care facility services (nursing facility care, ICF/IID vendor services, care in a state supported living center and a state center, and care in institutions for mental diseases) and eligibility for §1915(c) waiver services.
  • Persons who are receiving Medicaid-certified long-term care facility services (nursing facility care, ICF/IID vendor services, care in institutions for mental diseases) remain eligible for all other Medicaid benefits and continue to receive Medicaid benefits other than vendor benefits for as long as the equity value of the home exceeds the limit. Persons in a state supported living center or a state center or who receive §1915(c) waiver services are not eligible.
  • For persons in a state supported living center or a state center, Medicaid eligibility is denied for any period when the equity value of the home exceeds the limit. This is because the only benefit received is vendor payments.
  • If the §1915(c) waiver requires receipt of waiver services, then the §1915(c) waiver person is ineligible for all Medicaid benefits. Based on substantial home equity disqualification policy, the §1915(c) waiver person is ineligible as long as the equity value of the home exceeds the limit.
  • Denial based on substantial home equity disqualification does not disqualify a person for pure Qualified Medicare Beneficiary (QMB) or Specified Low-Income Medicare Beneficiary (SLMB) benefits. If all eligibility criteria for QMB or SLMB are met, certify the person for QMB or SLMB, as appropriate.
  • At all complete redeterminations, evaluation of the substantial home equity is required for persons who are in an institutional setting, when the person's date of application or program transfer request date was on or after Jan. 1, 2006. At redetermination, the appreciation of home equity could result in disqualification or denial if the home equity value exceeds the limit.

The substantial home equity limit is:

Effective Date
Limit
Jan 1, 2014 to present
$543,000
Jan 1, 2013 to Dec 31, 2013
$536,000
Jan 1, 2012 to Dec 31, 2012
$525,000
Jan 1, 2011 to Dec 31, 2011
$506,000
Jan 1, 2006 to Dec 31, 2010
$500,000


F-3620  Persons Not Impacted by Substantial Home Equity Disqualification

Revision 09-4; Effective December 1, 2009

Any person who has a date of application or program transfer request date for Medicaid in an institutional setting before Jan. 1, 2006, and who has continued to receive services with no break in coverage will not be impacted by the value of the home equity.

Regardless of the date of application or program transfer request date, any person who has either a spouse, minor child or disabled adult child residing in the home will not be impacted.

F-3630  When the Equity Value is Greater Than the Limit

Revision 09-4; Effective December 1, 2009

If an institutionalized person has a home with equity value greater than the limit, follow notice and procedures in Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment, and indicate on Form H3618-A, Resident Transaction Notice for Designated Vendor Numbers, the vendor number 5988 for the Home Equity Manor. Unlike a transfer of assets penalty period, there is no end date for Home Equity Manor unless the home equity value changes to be less than or equal to the limit. When the person's home equity value is less than or equal to the limit, do not impose this penalty.

A person applying for waiver services or requesting a program transfer to waiver services, who has home equity greater than the limit and does not have a spouse, child or disabled adult child living in the home, is not eligible for waiver services. A person must receive waiver services to be eligible for a waiver program. Follow current denial procedures for the applicable §1915(c) waiver program. Determine if the person is eligible for Medicaid programs other than §1915(c) waiver services.

F-3640  Reverse Mortgage or Home Equity Loan

Revision 09-4; Effective December 1, 2009

A person may use a reverse mortgage or home equity loan to reduce the person's total equity interest in the home. If the person has a reverse mortgage or home equity loan, consider this in determining countable home equity.

Based on conversion of a resource policy (see Section F-1260, Conversion of Resources), do not consider funds from the reverse mortgage or home equity loan as a countable resource or income in the month of receipt. Any remaining funds from a reverse mortgage or home equity loan become a countable resource as of 12:01 a.m. on the first day of the month after the month of receipt.

Although the funds are not considered a countable resource or income during the month of receipt, consider transfer of assets policy if the funds from a reverse mortgage or home equity loan are transferred during the month of receipt.

The money received is a countable resource the month after receipt. See Section F-4150, Promissory Notes, Loans and Property Agreements. Consider transfer of assets policy if the funds from a reverse mortgage or home equity loan are transferred after the month of receipt.

Follow regional procedures to request assistance from HHSC Legal regarding the terms and conditions of reverse mortgage or home equity loan information to assist in determining the appropriate amount of the reduction in home equity value.

F-3650  Documentation

Revision 09-4; Effective December 1, 2009

Obtain verification of home equity value, including a copy of the reverse mortgage or home equity loan, for the case record. Thoroughly document in case comments the home equity value and information about the reverse mortgage or home equity loan, if applicable.

F-3660  Undue Hardship

Revision 09-4; Effective December 1, 2009

Undue hardship may be considered when a person is impacted by the substantial home equity policy. Use the transfer of asset hardship criteria for undue hardship consideration due to substantial home equity policy. See Chapter I, Transfer of Assets, for undue hardship.

F-3700  Continuing Care Retirement Communities

Revision 10-1; Effective March 1, 2010

A continuing care retirement community (CCRC) offers life care to a person in one setting. For example, the facility may accommodate independent living, assisted living and nursing care as a person's needs change. A person may be required to pay a substantial entrance fee as a prerequisite to admission to a CCRC.

For purposes of determining a person's eligibility for, or amount of, benefits under the State Plan, this policy applies to persons residing in CCRCs or life care communities that collect an entrance fee on admission from such persons.

A person's entrance fee in a CCRC or life care community is considered a resource available to the person to the extent that:

  • the person has the ability to use the entrance fee, or the contract provides that the entrance fee may be used, to pay for care should other resources or income of the person be insufficient to pay for such care;
  • the person is eligible for a refund of any remaining entrance fee when the person dies or terminates the CCRC or life care community contract and leaves the community; and
  • the entrance fee does not confer an ownership interest in the CCRC or life care community.

Treat an entrance fee to a CCRC as a countable resource of a person applying for Medicaid in an institutional setting on or after Oct. 1, 2006, if the entrance fee meets all of the following requirements:

  • Person can use the fee to pay for care.
  • Person is eligible for a refund of any remaining fee upon death or leaving the CCRC.
  • Entrance fee does not confer an ownership interest in the CCRC.

The countable amount of the resource is the entrance fee value, minus the amount of the entrance fee spent on care.

If there is a community spouse, consider the countable entrance fee amount in the computation of the spousal share.

If an applicant for Medicaid in an institutional setting has a CCRC contract, obtain a copy for the case record and document the following elements in case comments:

  • CCRC contract date;
  • CCRC facility name;
  • CCRC entry date;
  • resource accessible (yes/no);
  • contract specifies fee be used to pay for care (yes/no);
  • eligible for refund on termination of contract or departure from the CCRC (yes/no);
  • CCRC entrance fee value;
  • amount of entrance fee spent on care; and
  • refundable amount.

See Section E-3331, Interest and Dividends.

F-3800  The Home and Transfer of Assets

Revision 09-4; Effective December 1, 2009

For treatment of all transfers of assets, consider common elements to transfer, including but not limited to, the following:

  • Look-back period
  • Person participation in transfers
  • Exceptions to the transfer of assets
  • Spouse-to-spouse transfers under spousal impoverishment provisions
  • Rebuttal of the presumption
  • Compensation
  • Undue hardship
  • Return of transferred asset

See policy beginning in Chapter I, Transfer of Assets.

F-3810  Transfer of an Excluded Home Cancels the Exclusion

Revision 09-4; Effective December 1, 2009

If a person who is not living in the home transfers ownership of his/her home for less than market value while it is excluded because of his intent to return, the transfer automatically nullifies the exclusion.

Ownership of property is evaluated as of 12:01 a.m. on the first day of the month. Changes related to resources after the first day of the month become effective as of 12:01 a.m. on the first day of the following month.

Example: Mr. Holmes owns a home. The value of the home is excluded from countable resources because of intent to return. During the middle of this month, Mr. Holmes transfers full ownership in his home to his grandson. Resource value of the home for this month is $0 because as of 12:01 a.m. the home was an excluded resource. Resource value of the home for next month is $0 because Mr. Holmes no longer has ownership in the home. After evaluating the transfer of the home to the grandson, this transfer does not meet any of the exceptions for a transfer outlined in Chapter I, Transfer of Assets, for exceptions to the transfer of assets. First, consider Mr. Holmes' equity value in the home as of 12:01 a.m. this month. Next, consider the amount of compensation Mr. Holmes received. The difference is the uncompensated value of the transfer on which the penalty would be based.

F-3811  Person Retains Some Interest

Revision 09-4; Effective December 1, 2009

Because ownership of property may be in whole or in part, if the person owns a home and gives it away during the look-back period, but retains an undivided partial interest or life estate in the property, evaluate the transaction for transfer of assets.

First, consider the person's equity value in the home as of 12:01 a.m. during the month of transfer. Next, consider the value of the retained undivided partial interest or life estate effective as of 12:01 a.m. during the month of transfer. The difference between the equity value and the value of the retained undivided partial interest or life estate is the presumed uncompensated transfer.

To determine the value of the retained undivided partial interest or life estate, take the following steps:

  1. Use the age of the person at the time of transfer.
  2. Use Appendix X, Life Estate and Remainder Interest Tables, to find the corresponding life estate interest factor.
  3. Multiply the corresponding life estate interest factor by the person's equity value in the home as of 12:01 a.m. during the month of transfer.
  4. The result is the value of the life estate.
  5. Subtract the equity value from the life estate value for the presumed uncompensated amount of transfer.

Example: Mr. House's equity value in the home as of 12:01 a.m. during the month of transfer was $200,000. Mr. House was age 72 during the month of the transfer. The corresponding life estate interest factor is .57261. The value of the life estate at the time of transfer is $200,000 × .57261 = $114,522. The difference between the equity value and the life estate is $200,000 − $114,522 = $85,478 presumed uncompensated transfer.

A person has a right to rebut the determination of the value of the retained undivided partial interest or the life estate as well as the presumed uncompensated transfer.

If the person owns a home and gave it away before the look-back period, but retained an undivided partial interest or life estate in the property, the person may be able to exclude the life estate based on the exclusions allowable for a home discussed in Section F-3100, The Home and Resource Exclusions.

See Appendix XVI, Documentation and Verification Guide.