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.

Additional Resources 

Blog comments

Wild horses (not verified)

I am a single mom of 3,one is grown &has a life,I am on ssdi,and get welfare for my two younger ones cause of absent father,then and death of my youngest father,we get medical mine threw my ssdi,I wanted to buy a house with my oldest and to finaully have a place to call home of our own .my oldest travels alot working,need a place to keep his things,he rents a place in town over,but only really home 5 or 6 days a month inbetween jobs,&,I rent from a friend but shes moveing .I wanted bolth our names on the deed,but because I am getting older with heart problems & Im on medical if I die would they take the house leaveing my kids with no home if bolth me and my oldest put our names on it,or should I not put my name on it at all If we do deside to try to buy one togeither?

Sat, 03/10/2018 - 18:08 Permalink
Dorey (not verified)

SSI-spot individual development “No funds were appropriated for the Assets for Independence (AFI) program for federal fiscal year 2017. Therefore, the Administration of Children and Families (ACF) will not be making new grant awards for the AFI program.” I don’t know about 2018. It would be nice if this were updated. I can’t find any current information.

Thu, 03/15/2018 - 10:49 Permalink
Dherrian scott (not verified)

Are there any programs for the parent of a permanently disabled child receiving SSDI? He is a minor, I want to purchase a home for us, my credit isn't great but a mortgage is better than fluctuating rent. Please help!

Thu, 03/15/2018 - 16:44 Permalink
JkM (not verified)

My child has autism and receives $750 a month for ssi. I am his mother and representative payee. If we were gifted money for a down payment on a home($18,000-20,000) how would that effect my sons ssi. My husband is the only one who works and our income from his job will not change. Im not so worried about the amount of his ssi being reduced as I am afraid of my son losing his Medicaid benefits. Could you please tell me how this would affect him and if there is anything we can do to prevent him from losing his medicId benefits and ssi.

Sat, 03/17/2018 - 17:46 Permalink

In reply to by JkM (not verified)

Hi There,

You should be okay since it is your receiving that down payment and not your son. However, I would make sure to double check with the SSA and your medicare office regarding this to be absolutely sure.

Thu, 03/22/2018 - 16:05 Permalink
Daniel Matterson (not verified)

Can I qualify for a loan being on S.S.I., I was in public housing section 8 but I had to move to Atlanta to receive better health care?

Wed, 03/21/2018 - 15:04 Permalink
W.Hellmann (not verified)

So I have a job but I am still on SSI and SSDI. My credit is good so getting the mortgage is not a huge worry to me. I am worried though about the down payment as well as if it will affect either of my payments. After reading this, it has cleared up a few of my questions but I now have 2 left. One, since I am working would I still qualify for help with down payments or for one of these mortgage programs. Two, would the mortgage count as income that affects my SSI? Thank you for your answers.

Sun, 03/25/2018 - 10:46 Permalink

In reply to by W.Hellmann (not verified)

Hi There,

I can't say for sure if you could qualify for help with your down payments. I would recommend speaking with someone at your local housing authority and see if they have any resources for you.

I would recommend speaking with someone at the SSA about whether or not your mortgage counts as income. It shouldn't but just to be safe I would double check with the SSA. Best of luck.

Tue, 03/27/2018 - 16:20 Permalink
Emily lieu (not verified)

I have read all of the possibilities of owning a home and how you can get b befits and programs to help you, I was looking into o bing my own home to better myself and my future that holds. I am currently in school and perminantly disable. I would like to apply for all of the programs To help me on my feet and be proud of myself and say I have done what I can and accomplished all my goals now it’s time to settle down. Renting is a good ay to take in consideration but I feel like owning a home is better because you have your own privacy and don’t have to worry about whether the music is to loud or anyone bothering you. I would like to read and hear more about the programs and policies and benefits housing can provide me with.

Fri, 03/30/2018 - 08:30 Permalink

In reply to by Emily lieu (not verified)

Hi Emily,

I am sure there are lot of great local resources in your area that will be able to assist you with that. Best of luck!

Fri, 03/30/2018 - 13:50 Permalink
Tracy Albano (not verified)

I am currently recieving SSI, I own my home but am behind with property taxes. I was told I have to sell my home to pay off town, what happens if I end up with enough money after the sale to get into something more affordable? do I loose my SSI income?

Fri, 03/30/2018 - 17:24 Permalink
Leslie Ratliff (not verified)

Thank u sooooo very much for the info. It takes a great or great persons to help out the less fortunate. You or a group of you are extraordinary people.

Tue, 04/17/2018 - 15:35 Permalink
Melanie Salazar (not verified)

This just made me realize that just maybe my dreams still can come true. Thank you for all the information.

Thu, 05/03/2018 - 19:02 Permalink
Rebecca Gregory (not verified)

This info is absolutely helpful - wonderful to hear! I believed I would be relegated to low- income apartment living for the rest of my life, but this gives me hope and something to strive for and save for. Thank you.

Sun, 05/13/2018 - 16:20 Permalink
Debra Stutts (not verified)

I receive disability benefits and Medicare with tenisie support. I have moved 3 times in the past 3 years due to several different issues. This rental property I'm in now has black mold they say I half to move out. I'm tired of moving would love to finally purchase a home that I can stay in permanently. Please advise me as to which route I can go. If any.

Wed, 08/15/2018 - 14:39 Permalink
leeanne (not verified)

I am 59 and on Social Security Disability Im already in a rent to own could I get a loan to pay it in full

Thu, 11/29/2018 - 21:52 Permalink
Chastity Scarber (not verified)

Yes I am on disability and was wondering if I can buy a house plz it is my first time to buy a home Plz

Tue, 02/12/2019 - 17:56 Permalink

In reply to by Chastity Scarber (not verified)

Hi There,

If you are on SSDI benefits then you can buy a home without having it affect you benefits, but if you are on SSI benefits, that they could be affected since SSI is based on income.

Fri, 03/01/2019 - 16:49 Permalink
Bill Ash (not verified)

I have a good friend paralyzed and on SSI of about $1,000/month. He and his wife have a home from before his accident, but they pay 8.4% with $940 monthly payment they really cannot afford, with a balance of about $84,000 needed to pay it off. Is there any program of housing assistance that might be possible to help them?

Thu, 07/25/2019 - 15:33 Permalink

In reply to by Bill Ash (not verified)

Hi Bill,

So sorry your friend is going through this. There are different non-profits that are dedicated to helping those that have experienced a spinal cord injury. I would see if there is one in your area that can help!

Fri, 07/26/2019 - 10:46 Permalink

In reply to by Nelson Rowe (not verified)

Hi Nelson,

I recommend talking to the SSA before making any decisions on a home. they will be able to give you more specific information about your case. Here is some more general information.
There are two types of benefits that you can be receiving from the SSA. The first is SSI. This is needs based and you are not able to exceed a certain amount of assets. However, one house generally does not count against this asset cap.
The other type of Benefits that you may be receiving is SSDI. This does not change based on assets and therefore you should have no problem purchasing a house while receiving those benefits.

Thu, 08/08/2019 - 15:27 Permalink
Oscar (not verified)

What if you are on SSI permanently and you inherited enough money to buy a home can you still keep your SSI?

Mon, 09/02/2019 - 15:00 Permalink

In reply to by Oscar (not verified)

Hi Oscar,

SSI is based on income and therefore an inheritance like that could affect your benefits. There are certain assets that do not count toward your asset limits. If you give a call to your local SSA field office, they will be able to give you more details about how your specific inheritance will affect your benefits.

Tue, 09/03/2019 - 17:24 Permalink

In reply to by Sean grealey (not verified)

Hi Sean,

SSDI is based on your own work history and therefore owning an asset like a house should not affect your benefits. You should be good to go, but if you are still concerned, I would check in with your local SSA office.

Fri, 09/13/2019 - 14:52 Permalink

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