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

Jaymie (not verified)

My friend is on disability with a 8 year old little boy her credit is bad but her daughter wants to purchase the house for her . The problem they are facing is she lives out of state and does not have the 20% down to put on house what can she do ???

Mon, 02/27/2017 - 18:13 Permalink
Bryan

In reply to by Jaymie (not verified)

Hi Jaymie,
I'm really not an expert at financing a house, but your friend may want to get in contact with her local SSA office regarding this, they can give her detailed information specific to her case.

Tue, 02/28/2017 - 14:11 Permalink
Tru le (not verified)

My dad receive Supplement Security Income and my mom is working, they both live with my brother, i live seperate with them, i plan to buy a house, but my income not qualify for loan, if i going to ask my mom to cosign with me to buy house, what will happen with my dad SSI?, is it possible to do that way. Thanks you

Sun, 03/05/2017 - 20:28 Permalink
kimberly (not verified)

Hi,I recieve SSDI but dont recieve nothing but 746 and was wanting to know will i qualify for owning my own home?

Thu, 03/16/2017 - 18:08 Permalink
Bryan

In reply to by kimberly (not verified)

Hi Kimberly,
I really could not say, as there are various programs that could help and it may depend on your state or local government's criteria.

Fri, 03/17/2017 - 14:01 Permalink
Stacey Kubiaczyk (not verified)

I get ssi so i could take care of my parents which went home to our Lord from their earthy home now I need help and no one will HELP me and but 8 house whicj which I do not want.. I get $735, a month , trying to get a job but so far it luck. so how can I get a home on that and no help

Tue, 03/21/2017 - 11:09 Permalink
Cathy (not verified)

I am on ssd and i own a home with no mortgage in nys. My sister files the rental income on her taxes. I been denied home loans because I don't file taxes. What should I do?

Wed, 03/22/2017 - 23:59 Permalink
Mike (not verified)

Can someone help me.I'm on as disability, and I need my own.I've been in the same place for 10yrs,my credit is not bad. I just need help. Wmadams71@aol.com. please help me make sense of what to do.

Thu, 03/23/2017 - 17:47 Permalink
Eric

In reply to by Michael (not verified)

Hi Michael
I'm really not an expert in this field, but you and your friend may want to get in contact with her local SSA office regarding this, they can give her detailed information specific to your case.

Best Wishes,
Eric

Mon, 03/27/2017 - 11:27 Permalink
Toni Aaron (not verified)

Thank you for this information, I still am a little unsure who to contact but it is good to know these programs exist, I am a disabled mother of 3 college students and no one wants to rent to us because I have the only income besides my kids financial aid but that is not considered income so we are looking at being homeless very soon.

Thu, 03/30/2017 - 00:13 Permalink
BC Shelby (not verified)

...just been certified to receive ongoing Disability benefits beginning in May and was wondering about ownership vs. renting. I basically need a place with as few stairs as I can find, and would like to remain in the inner environs, reasonably near shopping, services, and transit since I cannot drive.

Where I am currently living (renting a room) appears to have become an unstable situation due to the possibility of the owners having to sell the house (a common issue with rental homes these days). Also tin the city where I live (Portland OR) rents keep skyrocketing to where even the cost of a small studio far exceeds my monthly benefit.

Hoping if this can work out to find just a small single floor 1 BR home.

Fri, 04/07/2017 - 19:30 Permalink
Bryan

In reply to by BC Shelby (not verified)

Hi there,
You may want to contact housing organizations in the area, they may be better able to help you find housing that you would need.

Mon, 04/10/2017 - 10:11 Permalink
Ama (not verified)

I want to cry as I have been lost on this. Thank you for all the information. I have been homeless more times then I can count because of my disability and I at times feel hopeless.. Thank you for giving me some hope to a permanent shelter over my head.

Fri, 04/14/2017 - 16:15 Permalink
Bryan

In reply to by Debra (not verified)

HI Debra,
You may want to contact your local SSA office or your local chapter of Habitat for Humanity, they may be better able to help you.

Mon, 04/17/2017 - 09:30 Permalink
JC (not verified)

Hi Im a single woman on Ssi and i currently live with a friend. I need to find out how to get my own place to live and my children with be with me too. Im willing to rent or buy my own house. Can anyone give me some helpfull information?

Tue, 04/18/2017 - 11:03 Permalink
Silvia (not verified)

Thank you so much. You just brought me hope. I will give a little breath to my parents. They have been so supportive. But I will like to have something off my own.

Wed, 05/03/2017 - 01:19 Permalink
Anonymous (not verified)

I am an U.S. citizen living in Ireland with my Irish citizen wife for the past 12 years. We'd like to purchase a home in Belize to be our primary residence for a cheaper and warmer life.
I am 57 years old and have been on U.S. Social Security Disability for 12 years since I incurred a back injury followed by emergency surgery. My wife receives a Pension from Ireland due to her arthritis. As you can imagine the cold climate of Ireland isn't doing either of us any good. And the area we're looking at has a far lower cost of living!
Our combined monthly income is US$2421. (Kevin SSD= US$1421 per month & my wife's Pension =213.40euros per week which is about US$1009. per month).
We own our own car (Prius), are debt free, and have perfect credit.
I'd like to get a mortgage for a US$99,900. home with 5% down payment?
We have a perfect "on time" payment record for our rent here in Ireland.
Would we be able to get a mortgage for this Belize home?

Fri, 05/05/2017 - 08:00 Permalink
Kim (not verified)

Is there a limit on the home your looking to purchase? Someone told me it couldn't exceed a certain amount. Also, what about spouses income? Could his income cancel out any help I could possibly be qualify for??

Wed, 05/10/2017 - 15:11 Permalink
Rick (not verified)

I need advise I am on disability but my wife works we want to purchase a home but we dont have anything for a down payment both of us have over 700 in credit and she is full blooded native american. can you tell us how we should go about purchasing a home?

Sat, 05/13/2017 - 22:56 Permalink
Eric

In reply to by Rick (not verified)

Hello,

If you are on SSDI benefits, then you should be able to buy a home without having it affect your benefits.

Best of Luck,
Eric

Mon, 05/15/2017 - 16:40 Permalink
Eric

In reply to by Greg Roark (not verified)

Hi Greg,

Social Security does not prohibit an individual from using their disability benefits to buy a house. However, those who receive SSI or concurrent SSI/SSD benefits should be careful. SSI disability beneficiaries can own the home and land they live on, but other property will be counted as an asset. And to receive SSI, you can't have over $2,000 in assets (or $3,000 if you're married).

Best,
Eric

Tue, 05/23/2017 - 13:42 Permalink
Jamie (not verified)

I only recv 735. A month where can i find asst to put a doqn pymnt on a house and asst in buying it as well?

Sun, 05/21/2017 - 01:25 Permalink
Eric

In reply to by Jamie (not verified)

Hi Jamie,
Social Security does not prohibit an individual from using their disability benefits to buy a house. However, those who receive SSI or concurrent SSI/SSD benefits should be careful. SSI disability beneficiaries can own the home and land they live on, but other property will be counted as an asset.

Best of Luck,
Eric

Tue, 05/23/2017 - 13:45 Permalink
Anonymous (not verified)

I really needed this information. I need to buy a home and had no information on how to start. I hate the thought of living in an apartment or government home since I have always lived in the country. Seemed like there is no way out. Thank you

Sun, 05/21/2017 - 17:26 Permalink
R. Edward Jay (not verified)

This information has given me some hope of being a home owner, as it is I have been renting from a Slumlord who allows my neighbors to harass me and invade my privacy. In the past year I have come to find that I am what is termed as a person with an "invisible disability", I appear very normal but lack many social graces which leads to a lot of misunderstandings with other tenants. All I want is to live in peace, in certain ways I seem to fall through the system and my "Protected Status" is all but ignored by advocacy groups who always find one reason or another why they cannot assist me in any way. I am introverted I am greatly affected by my environment and negativity, being able to be by myself when needed is top on the list of my dreams of being a home owner, as it is now I feel trapped in my apartment most of the time.

Sun, 06/04/2017 - 12:18 Permalink
AJR (not verified)

I now have my sister, who is developmentally disabled and has Cerebral Palsy, since my mother has gotten up in age. I was injured at work in 2012. I had 3 fusions and a cage in my lower back. Nothing was done with my mid back and I have injections in my neck. I have a 17 yr. old son who needs a lot of help with school. I hope one or another program will help us to get a home. Thank you for the information.

Sun, 06/11/2017 - 16:59 Permalink
Bryan

In reply to by AJR (not verified)

Hi there,
You may want to reach out to your local housing authority, they may be able to provide you with some resources local to you.

Mon, 06/12/2017 - 15:39 Permalink
Cindy (not verified)

I saw were it was stated that ssa doesn't consider home a resource. I receive ssd(MS) and my daughter receives ssi(DownS) and have been working on my credit score which has improved leaps and bounds according to Experian. Also qualify may for 1st time buyers(0%down) maybe. once I get a divorce is it realy true I can purchase a house???I moved from 16 miles from Disney to Mississippi to get closer to family because my failing health but the only house I found to rent is lacking in multiple areas so a purchase of a house that is up to our needs (that I keep seeing for sale on different sites) would be a great. Although another move would be hard staying put is stressfull too. I really could own???

Fri, 06/23/2017 - 23:18 Permalink
Tess (not verified)

Hi, I'm disabled and have a home, I maxed out my credit card to keep it since my property tax is so high, I tried to apply for equity loan from a bank but got denied, is there a program that can help me. Thank you

Fri, 07/07/2017 - 12:01 Permalink

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