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

Submitted by Shane on Tue, 11/16/2010 - 14:16

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.

Blog comments

Julie (not verified)

I have an anonymous person or persons who want to help with the down payment but want to do it remaining totally anonymous is this possible?

Wed, 11/16/2016 - 01:20 Permalink
Hazel Hunter (not verified)

I am in the process of thinking about getting a mobile home as I have been renting all my life.I am going on 67 and have some disabilities non cureable but can nurse myself so to speak.I am alone ,all my immediate and distance family have disappeared and or deceased.I get SSI Disability income.It is low but I have good credit and a junker car 16 yrs old.Usually pay someone to take me to the doctor each month.Can I buy a mobile home while the owner owns the property,not sure how that works.If I pass I have no one to leave anything to .Yhe state would inherit what I have and its only things for survival,nothing of value at all.Thank You If not may I buy a home on this same land and a house on it.1 bedroom,1 bath and kitchen and some room for misc.

Thu, 11/17/2016 - 18:38 Permalink
Bryan

In reply to by Hazel Hunter (not verified)

Hi Hazel,
I would suppose that you would be able to own the mobile home, however if you're parking it on someone else's land, they may charge fees for it.

Tue, 11/22/2016 - 11:11 Permalink
Ikeisha (not verified)

Hi I need all the help I can get!.. My sister is getting SSD and my income is way under 400.00 and that's just a monthly, lately I been trying to own a home but I don't have any luck. Is there programs out here will help me and my sister on getting a house to call a home?

Sun, 11/27/2016 - 14:02 Permalink
Deanna

In reply to by Ikeisha (not verified)

Hi Ikeisha,
I'm sorry, this is a problem a lot of families experience unfortunately. The SSA does not offer a lot of assistance with this. I would recommend contacting local nonprofits and charities near you. You could do that, or see if she can qualify for Section 8 housing in your area.

Mon, 11/28/2016 - 14:04 Permalink
Denise (not verified)

I'm disabled and on social security benefits and I need help had to move from my rental of 10 years and staying at my sister because I became homeless. Any info would help me, rent to own or some kind of options, is appreciated thank you

Sun, 12/04/2016 - 03:36 Permalink
Bryan

In reply to by Louann Totten (not verified)

Hi Louann,
You may be able to do so, however I don't know of any programs that are specifically geared toward rent-to-own properties.

Thu, 12/08/2016 - 09:59 Permalink
Marcus E Graves (not verified)

I am disabled, & receiving SSDI, but, with poor credit. But, would like to buy a home for my family & I.
Is there a website that can assist me, in doing such?
I recently filed Chapter 13 bankruptcy, as well.
What is my next step?
Please help.

Wed, 12/14/2016 - 01:01 Permalink
Brandi (not verified)

In reply to by Marcus E Graves (not verified)

All chapter 13's have to paid if anything owed and released by the judge or satsfied and at least 3 year old or older!!! Or you will not even b considered for a home loan!¡!

Fri, 04/28/2017 - 22:22 Permalink
Andrea Chapa (not verified)

Wow I had no idea theirs these types of programs. Thank you so much your information was so helpful.

Sun, 01/08/2017 - 21:16 Permalink
JDThompson (not verified)

We currently own a home but it is in a very cold environment and the cold effects my disability. We have property in a warm place and want to build asmall home. Is there any help with construction loans?

Sun, 01/15/2017 - 11:52 Permalink
Bryan

In reply to by JDThompson (not verified)

Hi there,
I really could not say, you may want to contact the office that handles housing in the state that you plan to move to.

Wed, 01/18/2017 - 12:11 Permalink
Debra C (not verified)

In reply to by Mesha (not verified)

I am a plain jane disabled person that knows alittle about a lot. I am not a professional. But...I would definately advise you to look into that. That was a huge concern of mine before I started looking. Talk to lawyes who specialize in Elder, Trust and Estate law. There are situations the state can take your home after your death for "Payback" of state funded medical assistance you've received throughout your lifetime. Now SSI I believe, do not quote this as fact, will allow you to own a home, pass it down after death etc. if you purchased your home before turning 55 yrs old. Everybody's situation is different that's why I'd advise a Elder law atty to see if they can take your home, how/if you can divert that from happening and get a will set up. Good luck.

Mon, 05/01/2017 - 14:52 Permalink
Leah (not verified)

My son is 25 and is on SSI and SSDI. His total income is 780.00 a month with 80.00 in food stamps.
His brother wants to give him 10,000.00 to put down on a 16,000,00 trailer so that he has a permanent stable place to live.
How will this effect his benefits?
Can he own both a car and a trailer at the same time?
He will have to make payments from his small monthly funding.
How will gifting affect him?
He needs have a stable home and I am his payee.

Sat, 01/21/2017 - 11:16 Permalink
Bryan

In reply to by Leah (not verified)

HI Leah,
Yes, and yes, you child may be able to have both, however it may be a good idea to contact your local SSA office, they'd have full details about how your son can own both pieces of property and how it would effect his benefits.

Mon, 01/23/2017 - 10:13 Permalink
Rita (not verified)

I need to know how getting married and combining my little restraunt income with my boyfriends SSI disability income is going to affect his income. And also if we take our combined income and get a mortgage to buy a house, will end up having to take a cut in his pay just so we can have a normal life?

Sat, 01/21/2017 - 16:50 Permalink
Bryan

In reply to by Rita (not verified)

Hi Rita,
SSI income is determined by household for married people, so your boyfriend may have a change in his benefits after marriage.

Mon, 01/23/2017 - 10:15 Permalink
Katelynn (not verified)

Hi Shane! Thank You so much for this info. I became disabled early 30s so my monthly payment is only in the realm of $1000. With not too much credit experience, being disabled and low-income I have been worried I wouldn't be able to accomplish my dream of owning a home. I plan to put my backpay, or a good quantity

Tue, 01/24/2017 - 14:03 Permalink
Steven Bowman (not verified)

How Do I apply for this program ?/I am disabled with bad credit . Do I have any chance what do ever ?

Fri, 01/27/2017 - 22:45 Permalink
Eric

In reply to by Rhonda Carter (not verified)

Hi Rhonda,

To reopen a claim, you must file a new application for disability and ask Social Security to reopen your old claim. You must also tell Social Security in your second application that the onset date of your disability was within the timeframe covered by your first application (or for SSDI, within 17 months of the initial application).

Best Wishes,
Eric

Tue, 01/31/2017 - 16:38 Permalink
April Williams (not verified)

Thanks for the info so far but how do I get started I only received 765 a month. I would like to buy a home soon so that I can leave my kids something I am on social security

Wed, 02/08/2017 - 10:18 Permalink
Robert (not verified)

Hello
I became disabled about 5 years ago and almost immediately my wife of 20 years left and set off a chain of events that cost me everything and destroyed my credit. Within months I had lost my home, my things and my credit went from 750 to 500. It took almost two years before I finaly received SSD and with my award from ssd I purchased a very cheap home with the idea that I would not have a monthly rent to pay. I also purchased this home because it is itself two, two bedroom apartments. My intention was to live in one and rent the other to supplement my income as I only receive 1300 a month. But as you can expect with any cheap home it is in need of alot of work before I could possibly rent the one apartment out . I'm currently living in the home in the better of the two apartments but believe me it's just barely livable. My goal is to someday get to a position where I don't have to rely on bennifits or outside help. But I simply have not been able to save any money to do any work on the home. It is a good structure but it needs new wiring,plumbing,heat, carpet, paint, ect. I have no luxuries such as cable or Internet so it's not like I'm wasting any money I get, I just can't get ahead. Are there any programs that can help me with my home and get me closer to my goal of being independent once again. Before I became disabled I worked hard, always tried to improve my life and that of my family. I chased and achieved my dream of working in professional MotorSports and I've always and still do try to help anyone I can if I can. Even my idea for the rentals is to be able to offer a nice clean safe home for less than what is usually charged in this area. I just need help getting over the hump.
Thank you

Thu, 02/09/2017 - 22:34 Permalink
Debra C (not verified)

In reply to by Robert (not verified)

Go to HUD 's website put in the search for
"Home Improvements"
There are federal programs just for what you are looking for. Financial assistance to make your home safe, decent and can help guide you to even more local programs in your area that are in placertain for reasons such as yours. Your local housing agency will definately be able to direct you programs that either have funding for repairs or a no interest loan for repairs so you do not lose your forever home and make it a safe habitable place. "The American Housing Act" But do this things. Go to www.hud.gov website search home improvement

Mon, 05/01/2017 - 15:36 Permalink
Meme (not verified)

Hi
I'm separated and I have ssi benefits
My ex wife ask me to put my name in house mortgage loan with her
Wondering if that will affect my ssi benefit even I will not live with her in the new house?
Thank u

Fri, 02/10/2017 - 13:10 Permalink
Eric

In reply to by Meme (not verified)

Hello,
I would recommend asking a SSA representative via their website https://www.ssa.gov/ or calling them 1-800-772-1213

Best Wishes,
Eric

Fri, 02/10/2017 - 14:03 Permalink
Amy (not verified)

I have some backtime coming and want to implement it to buying a home (rather than paying rent every month for the rest of my life).. When trying to get a hud loan, if they look at how much you get every month, my check is small and that worries me that I won't qualify... I know that you get an X amount of money in assets for one person... I have a child that draws off her dad and he gives me some of her check/ money because she lives between us.. If I tell them that I get this income will it hurt trying to get a loan through hud or help? Glad someone posted about this, I am lost trying to get this done... I can't even make a purchase agreement with someone until I know where I am going with all of this and these decisions, and for some reason, SSI won't release the money to me unless I have a big purchase... Any info would be helpful..

Sun, 02/12/2017 - 16:38 Permalink
Bryan

In reply to by Amy (not verified)

Hi Amy,
I really could not say as I am not familiar with HUD loans, however you may want to report any income that you receive when applying for a loan.

Fri, 02/17/2017 - 10:31 Permalink
james (not verified)

if im on a ssi check, and there is this old house my dad wants too hand down too me as a gift and i want too live in it, can the deed too the property and the title go in my name or will it affect my ssi benefits or will i loose my ssi benefits.

Thu, 02/23/2017 - 00:47 Permalink
Bryan

In reply to by james (not verified)

Hi there,
It may affect your benefits as the house can be considered an financial resource if it's not your primary residence. It may be a good idea to contact your local SSA office regarding this for detailed information about your specific case.

Thu, 02/23/2017 - 09:02 Permalink
Tara (not verified)

I need help in obtaining a mortgage in the next 5 months. At which time I will become displaced and homeless. I have two minor children who need to be safe and be kids. Just because I became disabled doesn't mean a landlord should get the little money I have. Why should they become richer, while we become poorer or just making it. My kids are extremely good in school. However, the stress will affect them. My children deserve to live normal healthy lives. I am their mother, that is my job to do for them. Truth is I need help for the first time in my life. I was very ignorant to this problem in America in 2017. Everywhere I go to get help, all the government resources out there say the same thing " no money available at this time". This waiting list has been years. I am officially at the end in 5 months. Please if anyone knows of "REAL HELP" I would greatly appreciate it. My kids are my life. I love them so much. It's just not fair to them. We are the three musketeers looking and waiting for a miracle at this point. I am not a bum, never have been. I got sick, which made me disabled for the rest of my life. No one asked for this. There has to be help out there for situations like this one. Thank you to all who took the time to read my posting. Good luck to all of us. Greatly Appreciated! Tara

Thu, 02/23/2017 - 06:23 Permalink
Debra C (not verified)

In reply to by Tara (not verified)

Hi Tara
I am so so feeling sorry that you are going through what you are going through. I'm just another disabled person who found this site like you, asking the desperate question to google" Can a disabled person buy a home?"
Unfortunately I disagree with the author on so many levels. But putting that aside, I wanted to offer some info that I hope might help your situation. You sound like a powerful woman and know that no matter what, you and your children will be okay. I know it's feels horrible, but I know if you keep up the good fight you will survive. I hope you already found the help you so desperately need. I want to let you know I know everything you said to be true about no after no when you finally get desperate enough to ask for assistance.
I do know this. If you are in your situation of pending homelessness due to if
1. A seperation occurred from a significant other that was jointly helping you pay the rent/bills was due to physical violence or domestic assault. ....you could go to a women's homeless shelter. (ugh, I know it's aweful but..) A shelter has the ability and power to get you and your children into affordable housing. They have the ability to bypass waiting lists and have the BEST resources available to a single woman desperately seeking a better life for her and her children.
2. If you can bring the fact that you and your children will be homeless, on the exact date you and your children will be homeless, written and signed by the person responsible for your departure(i.e. "landlord stating they will kick you and your kids out on such and such date, if......"the reason here"....conditions aren't met" Take that to your county social services, emergency assistance, housing agency, women's shelters, etc. They may more apt to help you....
3. Don't forget to call subsidized apt. complexes, Town homes etc that offer rental subsidies to "Senior/Disabled". Those properties can not discriminate against you. You may have to reconsider a move out of the area. I know it's terrible, but rural developments often times have no waiting lists. Who knows, the fresh air might do you all good? I know it's an awful time for you but don't give up. Don't ever give up! Good luck

Mon, 05/01/2017 - 15:20 Permalink
Tara (not verified)

Another question, I am really disabled. On the McGill pain score I have and will continue (or get worse) a pain score of 47 out of the worst pain possible a 50. I'll be damned to allow this to take over my life even though no cure as of yet. However, why am I only able to receive the lower amount being SSI. Instead of SSDI or both for that matter. I was told because I chose to stay home with my kids and raise them because I am their mother. So because of that I get less (way less) money because I didn't work in the last 10 years. Until both children were in school all day. Of course that is when I became disabled. This is crazy to me. According to Dr Phil a parent who stays home with their children work 3 1/2 FULL TIME JOBS! No breaks. I loved and still do every minute of it. I only need some help. Never needed it before like I said. Now I need it. Our lives deserve to be happy, stress free. I will still do my part as a great mom, as will my kids as being wonderful children! Thanks again for your ear. I don't even know if this will help. But I am out of options......

Thu, 02/23/2017 - 06:53 Permalink

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