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

Kelly (not verified)

This information has encouraged me to continue moving forward and purchase my first home. Thank you I was really amazed by the truth that this site speaks. I have researched for so long and so many sites repeat each other without any say of truth. This site tells the truth. Thank you again

Sun, 11/12/2017 - 10:28 Permalink
Tristin (not verified)

I receive $600 a month for disability, and as soon as my disability was approved they cut my food stamps by more then half, I can't even cover rent with that....screw it I give uptbey

Tue, 11/14/2017 - 15:01 Permalink
Will (not verified)

I get ssi and I got bad credit can only get 695 a month is there programs in indiana will help buying a house to live in and assistance from places.

Thu, 11/16/2017 - 17:30 Permalink
Bryan

In reply to by Will (not verified)

Hi Will,
You may want to contact the housing authority in your state regarding this, they may be able to help.

Mon, 11/20/2017 - 09:23 Permalink
Bill (not verified)

Hi, I am on disability, poor credit, no money for down payment. I rent now but, I am getting older and need something of my own. any help.
thank you

Tue, 11/28/2017 - 10:18 Permalink
Melanie (not verified)

I couldn't find a way to email this site to get a question out my question is I am on Social Security disability in Nevada my mom just died and left me the house but I can't afford the monthly payments cuz I only make 7:35 a month are there any resources out there that can help me keep this house? Thank you.

Sun, 12/03/2017 - 18:10 Permalink
Anonymous (not verified)

Wow, thanks so much for posting all the info. My husband and I both are on disability. Currently living with our daughter and her family, and we are beyond cramped. We were told by a few lenders that our disability did not qualify as income to apply for a home loan. I have some hope that maybe we can buy a home now. Bright Blessings!

Mon, 12/04/2017 - 15:27 Permalink
Mel (not verified)

Thank you! I thought my dream of being a home owner was gone. You gave me positive information. Thank you! 1,000 times thank you!

Sun, 12/10/2017 - 00:05 Permalink
Mario (not verified)

I moved into a relatives house in a horrible town of Colorado where my medical is not even accepted because I'm to far. I've had Kaiser for al my medical needs and now I'm on some whole other nightmare medicare part D hell and 1hr drive to the nearest town, my truck broke down, I make $1000 from SSI Disability, and am suffering a lot. My aunt bought this house 3yrs ago as an investment, she lives in Mexico and has no SS# or ITIN. I told her about my situation and moved in after being homeless and tired of dealing with Section 8 nuts and druggies in San Diego and Pueblo Colorado but this town is far far from anything and its eating my brain from so much depression, I'm also the caretaker and have power of attorney for this house. My aunt has stated that she is willing to sign over the deed with the condition I make a will assigning her the house to her if the deed is switched to my name, I'd then sell, buy another house within 30days and I could regain my medical insurance with Kaiser and have many amenities for my mental health and HIV status. Am I hearing all this correct but am I really able to take over the deed and sell the house and be able to buy another one for me to live in? My relative paid $25 thousand for it 3yrs ago. She's very happy in her condo in Tijuana and just recently bought another one for her daughter and keeps telling me she regrets buying this house and did it to help me due to my HIV and mental health condition but I'm extremely depressed here and was much happier living in my truck in San Diego, I'd much much rather be in Pueblo Colorado, I'm an hour drive East of Pueblo. Any help with this? Thanks.

Mon, 12/25/2017 - 03:41 Permalink
Bryan

In reply to by Mario (not verified)

Hi Mario,
You may want to contact a local SSA office regarding this for some specific information about this, but the house may be regarded as income for the month that you receive it and a financial resource for any months after that. So receiving the house may change your SSI eligibility.

Wed, 12/27/2017 - 09:45 Permalink
Shaun (not verified)

I am a 33 year old paraplegic with a serve back injury from a AV fistula and I had saddle blood clot in 2017 as well. I had surgery to fix the fistula but I have constant back pain. I have not been cleared to work by my doctor and I may not be foreseeable future. I have bad credit as I worked before I became disabled. I have been working on getting credit better but after I got sick it seems like it is impossible. While I was sick before I could get medical help I lost my car. I also lost my truck in a divorce in 2015. Our roof has a large hole in it and when it rains water comes straight in. My couch is only 4 feet from the hole. Our roof is falling in and our bathroom tube leaks constantly. We have no air condition or heat in our house. Our kitchen sink needs repairing as well. I have ssdi but no ssi so I do not get medicaid. I am unable to get medical help to get better and we have tried everything.

Right now I live with my mother (she is also disabled), 3 children and brother. I only have access to our living room and kitchen. My wheelchair can not fit in any of the rooms or our bathroom. Our house sits on a hill and it is very difficult for me to even leave the house. We have a drive way but its in bad shape and makes going down the hill dangerous for me. Most of our yard is rough terrain and hard to travel over. I am basically stuck in our living room 24/7 and after 11 months it is starting to bother me. I am having difficulties typing this so I am going to end it here.
I want to either remodel our home to make it wheelchair friendly for me and my mother or be able to buy a bigger house under $150,000. We need help badly, my medicine is $800 a month without medicaid helping. I will not get medicare until May 2019.

Wed, 01/03/2018 - 13:21 Permalink
Jason and misty (not verified)

We are both on SSDI with a total income of about 2600 a month plus she has a part time job which makes our total bring home around 3600a month. Both of our credit scores are around 730 and I was wondering if their were any programs out there for disabled people like us who would love to be able to buy our own home. We pay 900 a month rent now and if there is any kind of program that we may qualify to be able to purchase a home instead of just having to rent the rest of our lives. If it is even possible for someone like us to qualify for some kind of program or someone to talk to that can help us in any kind of way would be greatly appreciated. Thank you

Mon, 01/08/2018 - 08:29 Permalink
Bryan

In reply to by Jason and misty (not verified)

Hi Jason,
You may want to contact the office in your area that handles housing, they may be able to help you with that.

Mon, 01/08/2018 - 17:10 Permalink
Jean kirkwood … (not verified)

Hi there my name is Jean K.,I'm 52 yrs old and on SSI....Im reading the comment on here about buy a house is it true....I collect$750.00 a month can i do the same please help me out on getting a house or and apartment please...!

Sun, 01/14/2018 - 22:10 Permalink
Sabrina B. (not verified)

I would love if someone could give me some insight. I have been on disability benefits since 2009. I have contacted my local housing authority, local low income housing programs seeking help from someone. Absolutely no one will help me. I get 969.00 dollar a month. Live in a college town and cannot even qualify for a application . You have to make 3 times the rent to get an application for a decent place to live here. The Places that are suppose to help from not being homeless. Waiting list. i have a 648 credit score. Can someone please tell how I can get a place to Live!!!! I want to buy my own house. I have taken care of all my student loans and clean my credit up. I am gonna be homeless in two months. Can't afford 700.00 a month anymore.

Sun, 02/11/2018 - 17:15 Permalink
Eric

In reply to by Sabrina B. (not verified)

Hi Sabrina,

I am so sorry to hear that. Glad to see you are being pro-active though. You may want to speak with a SSA representative to see what steps you can take. Wishing you nothing but the best.

Mon, 02/12/2018 - 16:37 Permalink
Dan (not verified)

My parents and I just moved to California. My parents purchased a mobile house, and I co-signed the loan and have my name on the deed in the case my parents die before the mobile house is paid off.

I am the only person that is living on SSDI. I don't have enough to meet the lot rent and monthly mortgage payments. Is this something I need to inform Social Security about having my name on the deed and the loan? Would they raise the amount I receive in SSDI in order to meet the amount that is needed to pay off the loan & lot rent?

I'm not sure where to look or find a program that fits my situation, because my parents does all heavy lifting. They only want my signature for the loan & deed, so it's easier to pass the home to me once they kick the bucket.

Sun, 02/18/2018 - 18:48 Permalink
Eric

In reply to by Dan (not verified)

Hi Dan,

I would recommend speaking with a SSA representative regarding this matter. Good news is that since you on are SSDI, your benefits will not be affected negatively because of it. Best of luck.

Mon, 02/19/2018 - 14:58 Permalink
Toni Chapman (not verified)

My bf and I are thinking about doing a rent to own but Im on ssi and he works and I don't want to lose my benefits at all should we continue on renting or try for rent to own?

Sun, 02/25/2018 - 15:53 Permalink
Mia Williams (not verified)

Thank you so much for this much needed information! It would be wonderful to own a home....I love gardening.

Wed, 03/07/2018 - 04:00 Permalink
Joe (not verified)

My father is on disability and currently owns a small house but will need something bigger so myself and wife can move in and care for him . He just about has the place paid for . With the amount of equity he has can he get financed for another home we would pay the payments on ??? Help??

Thu, 03/08/2018 - 14:41 Permalink

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