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Can you Buy a Home while Receiving Social Security Disability Benefits?

Many people who receive Social Security Disability benefits wonder if it is possible to own their own home, or if they will be stuck renting for the rest of their lives. There are many preconceived notions about people who receive Social Security Disability being unable to qualify for a mortgage. They fear that they do not have enough income or that the fact that they are on disability and not employed will get in the way of qualifying for a mortgage loan. This isn't necessarily the case. Many people who receive Social Security Disability benefits can qualify to buy a home and there are programs in place to help disabled individuals qualify for a mortgage. If you are receiving Social Security Disability benefits and you want to purchase a home of your own, there are some things you need to know.

Your Credit Score and Income

No matter what type of mortgage you are applying for, lenders will look at your credit score and income when determining whether or not to approve you for a loan. That does not mean, however, that you will not be able to purchase a home if your credit score is less than perfect or if your income is limited to your Social Security Disability benefits. There are programs in place for disabled individuals to help overcome the obstacles of imperfect credit and limited resources.

Programs to Help You Buy a Home

If you are receiving Social Security Disability benefits, there are programs that can help you purchase the home you need. The Fannie Mae Community HomeChoice program provides assistance to disabled individuals who want to purchase a home but have limited income. Even if your credit rating has suffered, you may qualify for a home loan under this program when receiving Social Security Disability, depending on your Monthly Benefit Amount (MBA). Fannie Mae can also provide you with a loan that will allow you to make improvements to the home you buy if those improvements are directly related to your disabling condition.

Another program that you may want to look into is Section 8. Many people assume that Section 8 assistance is only for renters, when in reality the program can also help you purchase a home. If you qualify for Section 8 and your local Section 8 office participates in the home ownership program, you can receive assistance in making your monthly mortgage payments, making home ownership more affordable.

Habitat For Humanity is another program that can help people who receive Social Security Disability enjoy the benefits of home ownership. The program is geared towards low-income families and provides low-interest mortgages ranging from seven to thirty years. In many cases you need to put “sweat equity” into the purchase of your home, but if you are unable to help with the construction of your home due to a disability you may be able to work out alternative arrangements. Habitat for Humanity programs are organized at the community level, and so eligibility rules may differ between local organizations.

Down Payment Issues

If you receive Social Security Disability and you are able to qualify for a mortgage program, you may be worried about coming up with the down payment for the purchase of your home. Fortunately, there are creative financing options available to help you meet your down payment requirements.

The Fannie Mae program discussed earlier may require a down payment of as little as $500 when you are receiving Social Security Disability. For other programs you may want to consider “sweat equity” options or you may want to offer full price for the home if the seller is willing to “gift” the down payment.

When receiving Social Security Disability, you can also look into grants or gifts for your down payment needs. Some programs, such as the IDA program, allows you to save money towards your down payment and will match part or all of the money you put into the IDA account to be used for the purchase of a home. So if, for example, you have saved $1,000 from your Social Security Disability benefits towards your down payment, the matching gift would be $1,000, giving you a total of $2,000 to put down on your home purchase.

Making Ownership a Reality

If you are receiving Social Security Disability and you want to purchase a home, there are resources out there to help you do it. Many organizations want to help those who are on Social Security Disability realize the dream of home ownership. Look into the programs mentioned above and see which ones you qualify for. If you use one of the programs to purchase a home, you can start putting part of your Social Security Disability benefits towards owning your home instead of putting rent in your landlord's pocket.

Comments

Thank you for this information. It was the foot in the right direction to finding the information I need to help my mother purchase a home.

We are both on social security disability and was on told we could not purchase a home is there a phone number we can call and get help to do this social security says we can and we want to.is there possibly away around this or something

Hi Brenda and Kevin,
You absolutely do have resources to help you out! I would give the Social Security Administration a call, their number is 1800-772-1213. They may have the resources you need to help buy a house.

I'm married and on disability but my husband isn't. Will we still be able to qualify for the assistance programs mentioned above?

Hi Tempestt,
I would not be able to say if you would, it would depend on your husband's income level and your own in some cases.

Your site says "Habitat For Humanity is another program that can help people who receive Social Security Disability enjoy the benefits of home ownership."
After some research, I discovered that their eligibility requirements are that you have to get no less than $25,000 in SS to qualify.. Now I don't know who on SSDI or SSI even comes close to that amt. So in my opinion that option is not a real feasible option for anyone here!
You should consider revising that statement or remove it entirely.
Thanks!

Hi PJ,
Thank you for letting us know! I did a little bit more digging, and I found that the eligibility criteria differs based on local organizations, so I updated the article to reflect that.

I am on SSDI and receive monthly benefits of $2,400 per month and my wife and ten year old daughter received $800 in auxiliary benefits. I know several people that get this amount so they are not in correct and I see no reason for them to revise

Hi John,
Thanks for sharing! I revised it to reflect the fact that eligibility requirements might vary by state.

I am currently working on getting my SSI and have a insurance settlement pending and am looking to purchase a house this information was helpful cause I was wondering if one could buy a house on disability I would like more information on this subject please thank you

Hi Dadie,
You may be able to, it would depend on the program that you're applying for.

Please tell me which programme
I need to go to or tell me the first step. If possible give me some link. Thank you

How can i get started been paying toouch on my own both boys of mine have been on SSI FOR YEARS ..want to be able to call a place home

Hi there,
Unfortunately, a home may be challenging to buy if you are on SSI benefits. You can have one home of any value, but you cannot have more than $2,000 in assets, which makes it hard for people to purchase a new home.

If someone receives SS1, and their children are purchasing a home for their parents cash, can the title be under the parents or will it effect them in their benefits.

Hi Flores,
You can absolutely own a home while getting SSI, the SSA does not count a person's primary residence as a resource if they own the home, either partially or in full.

I am 60 yes old and i receive ssi. I need guidance on how I can purchase a home staying with daughter and would love home of my own.

Hi Judy,
It can be very difficult to purchase a home while on SSI benefits, even though you are allowed one home of any value. I would recommend calling the SSA at 1-800-772-1213 to discuss setting up a fund that can help you pay for a home. The SSA will allow you to go over your asset limit if you are making a big purchase that will benefit your life like that.

Hi Lynda,
Yes. If you are on SSI benefits, you can have one home of any value. If you are on SSDI benefits, you can have multiple homes and not worry about losing your benefits.

I own my own home. My husband just passed away so I am getting 3000 a month from his social security. They are spraying a bean field right behind our house and my kids and I are very sick. I have no choice but move. My house is worth 240 thousand and I only owe 92 on it. Do these programs refinance houses also ? I could use both houses for collateral , the one I live in and the one I buy.

Hi Mary,
I'm sorry for your loss.
I'm not sure that they would refinance, as many of the programs are intended for people with lower incomes and less resources, generally.

i have 3 sons has ssi
can i buy house for them
can i use ssi income +my paystub to i got FHA lone
my income 3200$
ssi 640$ x3 = 1920$

Thank you for your help. I'm a disabled single father and I'm being asked to vacate the house I live in and I wanted to purchase a home for me and son. Instead of renting. God bless... where can I apply for a grant? Thanks in advance

B. Mcdonald ,Thank you so much on disability, people tend to wrong you in the wrong direction and you didnt, for that thank you, there are people like me looking for a place like home on disability and need help... You are very very informative so thank you very much

Hi Matthew,
It's actually a misconception that having a disabling condition makes you unable to perform any type of work, because you are "disabled". Being able to make improvements to their own home does not mean that the person would be able to do it full-time as a job.