FAA4.D Other Assets (OTAS) : 03 Other Asset Types : M Sales Contracts or Notes
M Sales Contracts or Notes
Money paid to the participant to be applied to the principal for any of the following is countable as a resource:
 
Sales contract
Mortgage
Promissory note
 
(For treatment of money paid to the participant to repay a loan, see Liquid Assets Notes Receivable)
 
Key contracts and notes on OTAS using the NO Other Assets Code.
 
NA EXCEPTION
Do not count installment contracts or notes held for the sale of land, buildings, vehicles, or other property as a resource when the contract or agreement is producing income consistent with the property's current market value. (See Property CMV)
Consider a contract or mortgage as income producing property, and do not count it as a resource, when it is producing monthly income at least 1% of the property CMV. To determine whether the contract is producing income consistent with the property's CMV complete the following:
Determine the property's CMV. This can be determined through realtor, by using the county assessor's statement card, or from an appraiser's written statement.
Divide the monthly income produced by the contract by the property's CMV.
Treat the income as follows:
When the income is less than 1%, the contract value is COUNTABLE as a resource.
When the income is at least 1%, the contract value is NOT countable as a resource.
When NOT countable, consider the total payment received from the sales contract as self employment income from which costs of doing business are subtracted. (See Self Employment Sales Contracts)
 
(For treatment as unearned income, see Unearned Income Sales Contracts or Notes)