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<br />a known rate of return (e.g., savings certificates), asset income will be calculated based <br />on that known rate (market value multiplied by rate of earnings). When the anticipated <br />rate of return is not known (e.g., stocks), SAHA will calculate asset income based on the <br />earnings for the most recent reporting period. <br />Investment accounts will be counted in the total assets calculated if total assets are $5000 <br />or greater. <br />Equity in Real Property or Other Capital Investments <br />Equity (cash value) in a property or other capital asset is the estimated current market value of <br />the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as <br />broker fees) that would be incurred in selling the asset \[HCV GB, p. 5-25\]. <br />SAHA Policy <br /> <br />In determining the equity, SAHA will determine market value by examining recent sales <br />of at least three properties in the surrounding or similar neighborhood that posses <br />comparable factors that affect market value. <br />SAHA will first use the payoff amount for the loan (mortage) as the unpaid balance to <br />calculate equity. If the payoff amount is not available, SAHA will use the basic loan <br />balance information to deduct from the market values in the equity calculation. <br /> <br />Equity in real property and other capital investments is considered in the calculation of asset <br />except <br />income for the following types of assets: <br /> <br />Equity accounts in HUD homeownership programs \[24 CFR5.603(b)\] <br /> <br />The value of a home currently being purchased with assistance under the HCV program <br />Homeownership Option for the first 10 years after the purchase date of the home \[24 CFR <br />5.603(b)\] <br /> <br />Equity in owner-occupied cooperatives and manufactured homes in which the family lives <br />\[HCV GB, p. 5-25\] <br /> <br />Equit <br />5-25\]. This real estate is considered a business asset, and income related to this asset will be <br />calculated as described in section 6-I.F. <br /> <br />Interests in Indian Trust lands \[24 CFR 5.603(b)\] <br /> <br />Real property and capital assets that are part of an active business or farming operation \[HCV <br />GB, p. 5-25\] <br />The PHA must also deduct from the equity the reasonable costs for converting the asset to cash. <br />Using the formula for calculating equity specified above, the net cash value of real property is <br />market value of the loan (mortgage) minus the expenses to convert to cash \[Notice PIH 2012-3\] <br />SAHA Policy <br /> <br />For purposes of calculating expenses to convert to cash for real property, SAHA will use <br />ten percent of the market value of the home. <br />Page 6-16 <br />04/01/14 <br /> <br />