IM-141 September 16, 2019; IM-63 May 15, 2003
According to 20 CFR 416.1201, the value of real property is the price the property is expected to sell for on the open market minus any debt owed.
If eligibility is not in question, such as a primary residence that is excluded from the resource determination, the participant’s estimate of property value may be accepted without additional proof, if the estimate is reasonable based on the property description provided.
If the participant does not provide an estimate, if the provided estimate is questionable, or if the value could affect eligibility, use one of the following methods to determine property value:
- Online real estate marketplace databases provided and used by real estate agents or other sources available at no cost to estimate what the home or property may be sold for based on recently sold comparable properties.
- For Missouri properties only, the fair market value calculated by the Assessor in the county where the property is located.
The assessed value is calculated by the Assessor using a percentage of the fair market value. The level of assessment varies based on whether the Assessor determines the property is residential (19%), agricultural (12%), or commercial (32%). The fair market value of the property is the assessed value divided by the level of assessment.
Assessed Value / Level of Assessment (percentage) = Fair Market Value
EXAMPLE: Residential property is assessed at 19% of the market value. The assessed value of a home is $10,000. Fair market value is $10,000 / 19% (.19) = the fair market value is $52,631.58.
EXAMPLE: Agricultural property is assessed at 12% of the market value. The assessed value of a cattle pasture classified as agricultural land is $10,000. Fair market value is $10,000 / 12% (.12) = the fair market value is $83,333.33
EXAMPLE: Commercial property is assessed at 32% of the market value. The assessed value of a retail space is $10,000. Fair market value is $10,000 / 32% (.32) = the fair market value is $31,250.00
- The purchase price if the property was purchased within the last 12 months (unless there is reason to believe the purchase price does not reflect the current market value).
- Value determined by knowledgeable sources, including, but not limited to, a statement from:
- a licensed real estate agent
- the local office of the Farmer’s Home Administration (for rural land)
- the local office of the Agricultural Stabilization and Conservation Service (for rural land)
- banks, mortgage companies, or other similar lending institutions
- the County Agricultural Extension Service
- a qualified, licensed appraiser
NOTE: If the participant does not provide proof of the value of the property, staff will determine the value based on the steps referenced above beginning with step 1 with the best information available. If staff are unable to make a determination using the steps above, and the participant failed to provide verification, eligibility will be denied for failure to provide proof of a resource.
Value of the Property for a Fractional Owner
If the participant, or his/her spouse, is a fractional owner, sharing ownership with someone outside of the household, only his/her portion of the property should be included in the resource determination. The value of their fractional share should be shown in the eligibility system and a comment should be used to explain the property total value, fractional ownership, and the fractional value. To determine ownership of a resource, refer to 1030.010.15 Determination of Ownership of Real Property. To determine if the fractional value is a counted resource, refer to 1030.000.00 Available Resources (OAA and PTD) or 1035.000.00 Real and Personal Property (AB).
EXAMPLE: Mr. Smith owns a home with his mother and his sister. Mr. Smith provides the deed to show that he owns ¼ interest in the home, his sister owns ¼ interest, and his mother owns ½ interest in the home. Mr. Smith’s mother lives in the home. Mr. Smith provides an assessment statement that the market value of the home is $100,000. Mr. Smith’s fractional value of the home is $25,000.