December 1973 Eligibility Requirements

1040.015.10.05.05 Promissory Notes

IM-82, May 20, 2019;

A promissory note is defined as a written agreement created with funds between two or more parties in which one party agrees to loan a specified sum of money in exchange for the agreement from the other party, and declares repayment of such loan according to the terms of the promissory note. 

A promissory note can also be created in exchange for repayment to be made by return of goods or services rendered, or by repaying the amount loaned in a specified amount of time either by lump sum or by regular scheduled payments with or without interest.  A promissory note will involve at least two parties, most commonly referred to as the Lender and the Borrower.    

Refer to the Training Guide for a Promissory Note involving Cash, or a Promissory Note involving Property.

Determining the Resource Value of Promissory Notes:

  1. If the applicant/participant is the Lender:
    1. Promissory note is a bona fide negotiable agreement:
  • Assume the resource value is the outstanding principal balance owed on the note unless verification is provided the note cannot be sold for that amount to a third party – at which time its resource value is the amount it can be sold for.
  • Cash, or real or personal property transferred to the borrower is no longer a resource unless the Lender can access the funds/property for his/her own personal use.
  • Payments received from the borrower against principal are considered unearned income in the month of receipt, and a resource if retained into the following month.  
    1. Promissory note is bona fide and non-negotiable:
  • The Promissory note is a resource of the Lender, but the resource value is $0 as it cannot be sold.
  • Cash, or real or personal property transferred to the borrower is no longer a resource unless the Lender can access the funds/property for his/her own personal use.
  • Payments received from the borrower against principal are considered unearned income in the month of receipt, and a resource if retained into the following month.