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The interest portion of payments received from any sales contract is countable income in the month it is received even if the contract is exempt as a resource. It does not matter whether the sales contract is for the sale of an exempt home or for the sale of some other asset.
o The portion of payments which is payment on the principal is a conversion of an asset. (If part of the payment was a lump sum, see Section 531.)
o Payments toward the principal are called "proceeds." Proceeds are defined as the down payment and any portion of periodic installment payments which is payment on the principal of the sales contract. (See Section 521-19 for all non-MAGI-based Medicaid Programs to determine if the sales contract is exempt as a resource or if it must be counted as an available resource.)
Interest on a sales contract may fluctuate each month. The amortization schedule should show monthly interest amounts the contract holder receives.