Can a HECM borrower's government assistance non-cash benefits be counted as qualifying income?

Lenders may count as income non-cash benefits being received by the HECM borrower through Federal, state or local government programs, e.g., Supplemental Nutritional Assistance Program (SNAP), energy assistance, etc. In determining whether such benefits may be counted as income the lender must:
• verify that the benefits are being received at the time of loan application, or that an award letter has been issued, and benefits will begin to be received within 60 days. Lenders may not count benefits for which the borrower is potentially eligible and intends to apply;
• verify that the benefits are not subject to any specific termination date other than one related to the death of the borrower or the sale of the property; and
• verify that approval of the HECM will not jeopardize continued eligibility for the benefits, e.g., HECM proceeds would trigger disqualification based on program income or asset requirements.

Some benefit programs may result in a reduction in the HECM borrower’s expenses rather than increasing their income (e.g., the borrower is charged a lower rate for insurance). In these cases the reduced amount may be used in calculating expenses and must not be treated as income. See Section 3.76 of the HECM Financial Assessment and Property Charge Guide for further information related to Expense Analysis.

For additional information see Mortgagee Letter 2016-10 and the attached HECM Financial Assessment and Property Charge Guide, Section 3.67 at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-01466