SecProbe.io

January 13, 2012        John A. Good, Esq. Bass, Berry & Sims PLC 100 Peabody Place, Suite 900 Memphis, Tennessee 38103-3672   Re: HMS Income Fund, Inc.  File Nos. 333-178548 and 814-00939  Dear Mr. Good:   On December 16, 2011, you filed a registra tion statement on Form N-2 for common
shares of HMS Income Fund, Inc. (the "Fund"),  a business development company.  We have
reviewed the registration statem ent and have provided our comments below.  For convenience,
we have generally organized our comments usi ng headings, defined terms and page numbers
found in the registration statement.   Where a comment is made in one location, it is applicable to
all similar disclosure appearing elsewhere in th e registration statement.  Our accounting staff will
contact you directly and provide you with their financial statemen t and other accounting-related
comments.
PROSPECTUS

Front Cover

1. The first paragraph on the Front Cover states  that the Fund's investment objective is to
generate both current income and the potential for long-term capital ap preciation.  Since the
name of the Fund is the HMS Income Fund, please revise this disclosure  to clarify that the
generation of income is the Fund's primary investment objective. See
 Section 35(d) of the
Investment Company Act of 1940 (the "1940 Act").

2. Disclosure in the second paragraph states  that, immediately prior to the commencement
of the offering, the Fund will acquire through a merger HMS Income LLC, which owns the Fund's initial portfolio, in exchange for shares of  common stock of the Fund to be issued to an
affiliate of Hines Interests Limited Partnership and an unaffiliated investor who are the members
of HMS Income LLC.  Elsewhere in the registrati on statement (page 2), it is disclosed that the
initial portfolio was purchased fr om Main Street, which is the s ub-advisor to the Fund.  Please

John A. Good, Esq.
January 13, 2012 Page 2   provide an analysis of these transactions  under Section 57 of the 1940 Act, including a
discussion of whether an exemption from the provisions of this S ection is necessary.
Additionally, please file the merger agreement as an exhibit to the registration statement.  See

Item 25.2.k of Form N-2 (copies of material contracts that are to be performe d in whole or in part
at or after the date of the fili ng of the registration statement).
 3. Please disclose the procedures to be used for valuing the in itial portfolio that will be
acquired by the Fund through the merger.  In additi on, please inform us in your response whether
a properly-constituted board (with a majority of non-interested members) will pass on the
valuation of the initial portfolio.  4. Footnote (2) to the table refers to the es timated 1.5% in offering expenses "we would
incur" in connection with this offering.  Since al l offering expenses are paid either directly or
indirectly by shareholders, please revise th e footnote by eliminating the term "we" when
referring to the payment of these expenses.
Prospectus Summary — The Company (Page 2)

5. The third paragraph of this section discu sses the initial portfolio that the Fund will
acquire.  For each investment in the initial portfoli o, please disclose, either  within the description
of the securities in the Schedule of Investments or as a narrative,  the following information for
the past three years:

 Whether the investment is on pa rtial or non-accrual of income;
 if the security is on partial or non-accrual of  income, a full descrip tion of the reasons why
income is not being accrued at the full coupon rate;
 whether there has been a material change to the creditworthiness of the borrower;
 whether the type of income being accrued is cash, non-cash (original issue discount or
payment in kind), or a co mbination of types; and
 whether the investment has been  restructured in a ny way since its initia l offering, such as
a change in interest rate, matur ity date, or type of interest.
 6. Please include an audited Special Purpose Schedule of Investments (based on AU 623
Special Purpose Financial Presentations) in the prospectus.
Prospectus Summary — Ri sk Factors (Page 3)

7. The eleventh bullet point in this section describes the type s of investments in which the
Fund will invest.  Please provide the Fund's po licies with regard to the credit rating and
maturities of its debt securities.  Additionally, please include the term "junk bonds" to refer to debt securities rated below inve stment grade, and describe the speculative nature of these types
of investments.

John A. Good, Esq.
January 13, 2012 Page 3
Prospectus Summary — Share Repurchase Program (Page 12)

8. This section states that, "[b]eginning 12 months after holding our initial closing, we
intend  to commence a share repurchase program pursuant to which we will conduct quarterly
share repurchases to allow our stockholders to se ll their shares back to us." (Emphasis added.)
Please revise the above disclosure to state that there is no assurance the Fund's board will decide
to conduct a share repurchase, and that it will be  conducted only when the board determines it is
in the best interest of the Fund to repurchase shares.
 9. Please revise the disclosure in this sec tion in accordance with the guidance on issuer
repurchases set forth in Guide 2 to Form N-2.  10. The first paragraph in this section states that  the repurchase price per share to be paid by
the Fund to the stockholder will be equal to the net asset valu e per share of the shares as
disclosed in the Fund's most recent periodic report  filed with the SEC.  This may result in the
Fund repurchasing shares at a net asset value that is several months old, and significantly higher
than the actual current net asset va lue of Fund shares.  Please expl ain to us why it is appropriate
for shareholders who do not par ticipate in the share repurchas e to have the Fund repurchase
shares at a significant premium to their current net asset value.
Prospectus Summary — Investme nt Advisory Fees (Page 13)

11. The first paragraph of this section stat es that the Fund's management fee will be
calculated at an annual rate of 2.0%  of average gross assets.  Plea se also provide the management
fee as a percentage of average net assets.  See
 Instruction 1 to Item 9.b(3) of Form N-2.
 12. The fourth paragraph of this section states  that the Adviser will be entitled to a
subordinated liquidation incentive fee equal to 20% of the net pr oceeds from the liquidation of
the Fund in excess of adjusted capital.  Pleas e disclose why the subordinated liquidation
incentive fee is necessary and why the additiona l services, if any, are not already compensated
by the three other fees in cluded in the Advisory Agreement.  In addition, please explain to us
why the fee does not create a conflict of interest  for the Adviser, in th at it may provide an
incentive to liquidate the Fund.  Also, please explain to us ho w this subordinated liquidation
incentive fee is consistent with Section 205 of the Investment Advisers Act.  We may have
additional comments after the Fund files the Ad visory Agreement as an exhibit to this
registration statement.
Prospectus Summary — Di stributions (Page 15)

13. This section states that a portion of the Fund's distributions  may represent a return of
capital to the Fund's investors.  Please discuss the short term a nd long term tax implications for
investors of distributions of a return of capital.

John A. Good, Esq.
January 13, 2012 Page 4
Fees and Expenses (Page 17)

14. The sales load to dealer manager caption re flects that 10% of the offering price will be
paid to the dealer manager.  Please confirm to us that the Fund's FINRA examiner has
determined that the Fund's sales load should not be deemed to be excessive compensation.

15. The Example shows the expenses a shareholde r would incur on an investment in the Fund
of $2,500.  Please revise the Example to show the expenses a shareholder would incur on a
$1,000 investment in the Fund.  See
 Item 3.1 of Form N-2.

16. Footnote (2) to the table provides that the A dviser will be responsible for the payment of
organization and offering expenses to the exte nt they exceed 1.5% of the aggregate gross
proceeds from offerings of common stock during th e offering period.  Please include in footnote
(2) an estimate of the following:
 the size of the offering in dollars and shares;
 the total offering costs in do llars and costs per share;
 the offering costs expected to be paid by the Adviser in dollars and costs per
share; and
 the offering costs expected to be pa id by the Fund in costs per share.

17. Footnote (4) to the table stat es the amount of the Fund's annual expenses is based on the
assumption that the Fund will sell $150 million wo rth of its common stock in this offering.
Please explain to us the basis for this estimate.
Risk Factors — Risks Relating to th is offering and Our Common Stock — Certain
provisions of our charter and bylaws as we ll as provisions of the Maryland General
Corporation Law could deter takeover attempts  and have an adverse impact on the value of
our common stock.  (Page 47)

18. Disclosure in the first paragraph of this section states that the Fund's bylaws currently
contain a provision exempting from the Mary land Control Share Acquisition Act (the
"MCSAA") any and all acquisitions of shares of the Fund's stock, but that the Fund's board may
amend the bylaws to remove this exemption.  The staff of the Division of Investment
Management has taken the position that, if a bus iness development company fails to opt-out of
the MCSAA, its actions are inconsistent with Section 18(i) of the 1940 Act.  See
 Boulder Total
Return Fund, Inc. (SEC Staff No-Action Letter (Nov. 15, 2010)) http://www.sec.gov/divisions/investment/noact ion/2010/bouldertotalreturn111510.htm).  Please
explain to us why amending the Fund's bylaws to opt-in to th e provisions of the MCSAA is
consistent with the staff's position.

John A. Good, Esq.
January 13, 2012 Page 5
Management's Discussion and Analysis of Fi nancial Condition and Results of Operations
and the Company's Expected Operating Plans — Revenues (Page 56)
19. This section states that the Fund may generate revenue in th e form of fees for providing
managerial assistance in connection with its investments.  In your re sponse to this letter, please
address the issue of whether it is appropriate fo r the managers of BDCs to obtain fee income for
providing managerial assistance.  The legisla tive history of the Sma ll Business Investment
Incentive Act of 1980 indicates that it was the in tent of Congress to libe ralize the treatment of
venture capital investment companies to permit incentive compensation because of the
managerial assistance such managers provided sm all businesses.  BDC managers were permitted
to receive incentive compensation in the form of  an incentive fee (for external managers) or
stock options (in the case of inte rnal managers) to bring their e xpertise to fledgling or foundering
companies.  Please explain to us why it is approp riate for BDC managers or their affiliates to
receive both incentive compensation and fees for providing the assist ance that was the
justification for allowance of incentive compensation in the first place.
Management — Board of Directors and Executive Officers (Page 81)

20. Please disclose any directorships held by each of the Fund's directors during the past five
years.  See
 Item 18.6(b) of Form N-2.

Management — Corporate Leadership Structure (Page 83)

21. Please disclose in this section why the Fund ha s determined that its leadership structure is
appropriate given the specifi c characteristics or circumstances of the Fund.  See  Item 18.5(a) of
Form N-2.

Investment Advisory and Administrative Serv ices Agreement — Incent ive Fees (Page 90)

22. The third paragraph of this section discusse s the calculation of the subordinated incentive
fee.  Please provide a graphic pr esentation of the breakpoints relate d to this incentive fee in order
to clarify the various hurd le points and rates.

Notes to Unaudited Financial St atements — Note 2 (Page F-6)

23. Organizational and Offering Costs.   Disclosure in this section states that organizational
and offering costs have been recorded as a re duction to additional pa id in capital in the
accompanying balance sheet.  Since organization co sts are expensed as incurred, please explain
to us why these costs are recorded as a reduction of paid in capital.  See  FASB ASC 720-15-25-
1.  Additionally, please explain to us why a st atement of operations is not included in the
financial statements.

John A. Good, Esq.
January 13, 2012 Page 6   24. The Notes to the Financial Statements do not include disclosure  regarding material
related party transactions.  Pleas e provide this disclosure, includi ng identification of all advisory
and sub-advisory agreements.  See
 FASB ASC 850-10-50-1.

GENERAL COMMENTS

25. We note that portions of the filing are inco mplete.  We may have additional comments on
such portions when you complete them in pre- effective amendments, on disclosures made in
response to this letter, on info rmation you supply to us, or on exhi bits added in any pre-effective
amendments.  26. If you intend to omit certain information from  the form of prospectus included with the
registration statement that is d eclared effective, in reliance on Rule 430A under the Securities
Act of 1933 (the "Securities Act"), please iden tify the omitted information to us, preferably
before filing the final pre-effective amendment.  27. Please advise us if you have submitted or expect to submit an exemptive application or no-action request in connection with  your registration statement.
 28. Responses to this letter should be in the fo rm of a pre-effective amendment filed pursuant
to Rule 472 under the Securities Act.   Where no change will be made in the filing in response to
a comment, please indicate this f act in a letter to us and briefl y state the basis for your position.
 29. We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing reviewed by the staff to be certain that they have provided all information investors
require to make an informed decision.  Since the Fund and its management are in possession of
all facts relating to  the Fund's disclosure, they are respons ible for the accuracy and adequacy of
the disclosures they have made.     Notwithstanding our comments, in the ev ent the Fund requests acceleration of the
effective date of the pending registration statement,  it should furnish a letter, at the time of such
request, acknowledging that
 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e Commission from taking any action with
respect to the filing;
 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the Trust from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and
 the Trust may not assert this action as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of  the United States.

John A. Good, Esq.
January 13, 2012 Page 7    In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Investment Management in connection
with our review of your filing or in response to our comments on your filing.   We will consider a written request for acceleration of the effective date of the registration statement as a confirmation of the fact that those requesting accelerat ion are aware of their
respective responsibilities. We w ill act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.                * * * * * * *       Shou