757-3          LOANS

All bona fide loans, including educational, personal, and commercial loans, are disregarded as income.  A bona fide loan is a debt that the borrower has an obligation to repay and expresses his or her intention to repay.

The bona fide nature of a loan must be verified and documented in the case file.  Commercial and educational loans can normally be verified by seeing a copy of the written loan agreement or a document identifying the payment as a loan.  In the case of personal loans, the verification must provide, at minimum, acknowledgment by the borrower and lender that an obligation to repay the loan exists, and acknowledgment by the borrower that he or she intends to repay the loan (with or without interest).

If it is determined the funds received are not from a bona fide loan, (there is no repayment obligation or the borrower has no intention of repayment) the amount received potentially may or may not be countable income.  (See ATAPAlaska Temporary Assistance Program MSManual Section 758-4.)