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

Jenjer Johnson (not verified)

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.

Sat, 12/19/2015 - 09:46 Permalink
Brenda/kevin (not verified)

In reply to by Jenjer Johnson (not verified)

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 there possibly away around this or something

Sun, 02/14/2016 - 16:48 Permalink

In reply to by Brenda/kevin (not verified)

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.

Tue, 02/16/2016 - 12:45 Permalink
David Mitchell (not verified)

In reply to by Laurie (not verified)

I am on disability need help to get out of this living nite meat I in an get in to something on my own an on my disability an not th best credit an all out of the nite meR I live in

Sun, 10/29/2017 - 11:15 Permalink
Tamara Shrewsberry (not verified)

In reply to by Jenjer Johnson (not verified)

Yes, because of my health I really need to move down south where the winters aren't so bad. I've been trying to figure out how I can get the money so me and my family can move. I'm going to do all of what I can to get me a home down South.

Mon, 03/20/2017 - 21:33 Permalink
My name is Rob… (not verified)

In reply to by Tamara Shrewsberry (not verified)

Yes I would like some information and how you went about getting assistance to move down south or even Florida appreciate some feedback to reach me at Roberto

Sun, 08/27/2017 - 06:42 Permalink

In reply to by My name is Rob… (not verified)

Hi Roberto,
As far as I know, there is no federal program that assists with voluntary relocation to the southern states or Florida in particular.

Mon, 08/28/2017 - 09:21 Permalink
Teresa ivory (not verified)

In reply to by Jamie Carroll (not verified)

Iam on Disability social just one income credits not that good I tried USDA homes they told me I do not have enough income to get my own house my income to low but iam tried of renting iam 53 year old I need something I can call my own but ever loan co.turn me down..

Fri, 04/27/2018 - 11:18 Permalink
Tempestt (not verified)

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

Thu, 03/10/2016 - 14:04 Permalink

In reply to by Tempestt (not verified)

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.

Thu, 03/10/2016 - 14:52 Permalink

In reply to by Kim (not verified)

Hi Kim,
I really could not say as income requirements would vary by location and by program. You may want to get in touch with one of them for more information.

Wed, 05/10/2017 - 16:53 Permalink
PJ (not verified)

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.

Fri, 04/01/2016 - 18:39 Permalink

In reply to by PJ (not verified)

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.

Mon, 04/04/2016 - 12:27 Permalink
John (not verified)

In reply to by PJ (not verified)

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

Tue, 05/10/2016 - 11:11 Permalink
JR (not verified)

In reply to by Bryan

I too receive SSDI monthly benefit of $2063 and my son receives RSDI from my claim of $1031 per month putting us (family of 2) at $3094 a month. So I agree with John that there should be no revision because there are those of us out there that do meet that income on SSDI.

Tue, 06/14/2016 - 09:33 Permalink
Nicole (not verified)

In reply to by JR (not verified)

A revision is needed. Everyone circumstances are different. I am young and I don't have children but I have worked until the point I couldn't anymore and I only receive $1100/month from SSD.

Fri, 09/02/2016 - 10:19 Permalink

In reply to by Nicole (not verified)

Hi Nicole,
I'm sorry to hear that! It's true, everyone's circumstances are different and not everyone is eligible for every type of assistance.

Wed, 09/07/2016 - 10:09 Permalink
John (not verified)

In reply to by Nicole (not verified)

I don't understand why you and a couple of others keep calling for a revision when the original poster that started this blog stated that Habitat for Humanity has a minimum SSDI income of $25,000 to take advantage of their program and she stated nobody makes that amount well in fact several of us do so it is true and the statement should stand as is. This woman made an amazing sight for us to get the help we need

Mon, 12/05/2016 - 10:27 Permalink
Shell (not verified)

In reply to by John (not verified)

John, I'm not sure why you keep restating the same thing about a revision being needed? If you will read the information was revised because the $25,000 limit is not the case in all areas of the country. I think we all understand now that you most certainly receive MORE than 25,000 a year from SSDI, however for a younger person that has unfortunately found themselves disabled well before they were 50, like yourself, their monthly payment will be much less. So the revision was needed and is helpful for those that need that information based on where they live.

Mon, 01/23/2017 - 03:24 Permalink
Jeannine (not verified)

In reply to by Tammy (not verified)

I too only receive 804$ monthly in MA. My life long dream to own my own little house. Could this actually happen, to me? Please,please if anyone can help me out please let me know,I thank you from the bottom,the top and we'll my whole heart. I whole heartedly thank you. Take care.

Wed, 05/10/2017 - 18:42 Permalink

In reply to by Jeannine (not verified)

Hi Jeannine,

You may be able to buy a house on Social Security benefits. The SSA has several resources on it's website that can help out.

Best Wishes,

Thu, 05/11/2017 - 09:06 Permalink
Debi (not verified)

In reply to by Bryan

Wow, I'm looking at what some get for SSDI and I'm thinking "what happened to me". I get 714. I tried to get financing recently have a good amount for a down payment and excellent credit rating and I was told nope. I only make 714. My son is my caretaker and pays me rent, they won't accept his income towards my income. I'm stuck in this rut and I just don't know where to go. It's like I'm falling through cracks. :(

Wed, 03/14/2018 - 14:28 Permalink

In reply to by Debi (not verified)

Hi Debi,

I am sorry to hear that. You may want to try going to your local housing commission to see if they have any resources for you. Wishing you nothing but the best.

Wed, 03/14/2018 - 14:30 Permalink
John (not verified)

In reply to by PJ (not verified)

I receive 2000 and $19 a month on SSDI and my ex-wife and 12 year old daughter received $819 in auxiliary benefits. So there is no reason to take down her information she is absolutely correct it depends on how much you earn before you are disabled I have worked hard my entire life and since age 15 years old to when I was injured at age 50 giving me 35 years of uninterrupted work most of it in the service of our nation.

Mon, 12/05/2016 - 10:24 Permalink
valerie (not verified)

In reply to by PJ (not verified)

sadly...that is true!! i contacted Habitat for Humanity & was looking for aid. I received retro social & was asking for aid through their program. They asked my monthly income & expenses.. Mind you I have NO expenses & have $30k to put down & simply wanted a small home (many I see selling for 50,000). they called back stating I don't get enough income. Imagine that... a program for low income & NOT enough income. NEVER was I even able to state the large amount I had to put down. Simply asked my monthly income, if i could donate a very small amount (either 50/month or week, forget which) and donate a small amount of sweat & time. DENIED!! I'd say it's safe to take them off the list of aid.

Tue, 10/03/2017 - 16:19 Permalink

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