(A) The home replacement exclusion allows an individual to sell an exempt home that was the individual's principal place of residence without having the proceeds of the sale count as resources if he/she uses those proceeds for the purchase of another exempt home and for the costs incidental to occupying the substitute home. This exclusion from resources applies to the proceeds of the sale of the exempt home if they are used or obligated to purchase and occupy a substitute exempt home by the last day of the third full month following the month of receipt. If the home is not replaced within this period, then the proceeds are to be counted as a resource beginning with the month following the month they were received by the individual.
(B) The exclusion does not apply to interest earned on the proceeds of the sale.
(C) The home replacement period begins on the date that the proceeds of the sale are received by the individual The home replacement period ends on the last day of the third full month following the month the proceeds are received.
(D) The proceeds of a home sale are the net payments received by the seller after satisfaction of all encumbrances and sale expenses. "Sale expenses" are all expenses that must be paid by the seller in connection with the sale of the home including but not limited to 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.
(E) If the individual states that the home is being replaced, the CDJFS shall obtain a signed statement from the individual. The CDJFS shall not implement the exclusion until the statement is obtained. The following sample sets out the intent, facts, and acknowledgement that are required in such a statement:
"On _____, I received $ _____ in proceeds from the sale of my home. I intend to replace that home with another home by __________ (insert the last day of the third full month following the month of receipt of the proceeds). I realize that any proceeds of the sale not used for a substitute home by that date then may count in determining my Medicaid eligibility beginning on __________ (insert first day of first month following receipt)."
(F) The CDJFS shall verify the amount of the proceeds and the date they were received by obtaining a copy of the settlement sheet or other documents prepared at settlement and received by the individual from the sale.
(G) By the last day of the month in which the home replacement period expires, the CDJFS shall contact the individual to verify the dates and amounts of any allowable costs or deductions for the replacement home by obtaining written evidence (e.g., contracts, bills, receipts, settlement sheets) on the substitute home, The CDJFS shall charge any retained proceeds not used or contracted to be used toward the replacement home before expiration of the replacement period as a resource beginning with the month following the month of receipt. If the individual has not replaced the home as he intended to, all of the proceeds will also count as a resource beginning with the month following the month of receipt.
(H) If the home is being replaced due to loss or damage resulting from a disaster, refer to rule 5101:1-39-26 of the Administrative Code.
Eff 11-1-86 (Emer.);
Rule promulgated under: RC 111.15
Rule authorized by: RC 5111.01, 5111.011
Rule amplifies: RC 5111.01, 5111.011
R.C. 119.032 review dates: 06/13/2002 and 11/07/2007