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

m mccune (not verified)

I am currently working on getting my SSI and have a insurance settlement pending and am looking to purchase a house this information was helpful cause I was wondering if one could buy a house on disability I would like more information on this subject please thank you

Wed, 04/06/2016 - 00:30 Permalink
Dadie (not verified)

In reply to by Bryan

Please tell me which programme
I need to go to or tell me the first step. If possible give me some link. Thank you

Wed, 04/13/2016 - 22:28 Permalink
Loni (not verified)

How can i get started been paying toouch on my own both boys of mine have been on SSI FOR YEARS ..want to be able to call a place home

Tue, 04/12/2016 - 12:22 Permalink

In reply to by Loni (not verified)

Hi there,
Unfortunately, a home may be challenging to buy if you are on SSI benefits. You can have one home of any value, but you cannot have more than $2,000 in assets, which makes it hard for people to purchase a new home.

Tue, 04/12/2016 - 13:20 Permalink
Flores (not verified)

If someone receives SS1, and their children are purchasing a home for their parents cash, can the title be under the parents or will it effect them in their benefits.

Wed, 04/13/2016 - 13:21 Permalink

In reply to by Flores (not verified)

Hi Flores,
You can absolutely own a home while getting SSI, the SSA does not count a person's primary residence as a resource if they own the home, either partially or in full.

Wed, 04/13/2016 - 14:52 Permalink
Judy (not verified)

I am 60 yes old and i receive ssi. I need guidance on how I can purchase a home staying with daughter and would love home of my own.

Sat, 04/23/2016 - 14:10 Permalink

In reply to by Judy (not verified)

Hi Judy,
It can be very difficult to purchase a home while on SSI benefits, even though you are allowed one home of any value. I would recommend calling the SSA at 1-800-772-1213 to discuss setting up a fund that can help you pay for a home. The SSA will allow you to go over your asset limit if you are making a big purchase that will benefit your life like that.

Tue, 04/26/2016 - 13:23 Permalink

In reply to by Lynda (not verified)

Hi Lynda,
Yes. If you are on SSI benefits, you can have one home of any value. If you are on SSDI benefits, you can have multiple homes and not worry about losing your benefits.

Tue, 04/26/2016 - 13:23 Permalink
mary mitchell (not verified)

I own my own home. My husband just passed away so I am getting 3000 a month from his social security. They are spraying a bean field right behind our house and my kids and I are very sick. I have no choice but move. My house is worth 240 thousand and I only owe 92 on it. Do these programs refinance houses also ? I could use both houses for collateral , the one I live in and the one I buy.

Tue, 05/17/2016 - 17:20 Permalink

In reply to by mary mitchell (not verified)

Hi Mary,
I'm sorry for your loss.
I'm not sure that they would refinance, as many of the programs are intended for people with lower incomes and less resources, generally.

Wed, 05/18/2016 - 10:30 Permalink
maher (not verified)

i have 3 sons has ssi
can i buy house for them
can i use ssi income +my paystub to i got FHA lone
my income 3200$
ssi 640$ x3 = 1920$

Thu, 05/19/2016 - 17:57 Permalink
Robert S (not verified)

Thank you for your help. I'm a disabled single father and I'm being asked to vacate the house I live in and I wanted to purchase a home for me and son. Instead of renting. God bless... where can I apply for a grant? Thanks in advance

Sat, 05/21/2016 - 17:37 Permalink
edna (not verified)

In reply to by Robert S (not verified)

My son an I are disabled an own our home no morage but it's not safe in some parts an need some improvements but since my score is only 540 I can get a loan to fix the house that can become very harmful to us we have tryed an all we get is sry we can help u with ur credit but what about out Heath an issues that need to be fixed we have not even a side walk an I'm reaching out for help pls

Fri, 08/05/2016 - 10:04 Permalink
Anonymous (not verified)

B. Mcdonald ,Thank you so much on disability, people tend to wrong you in the wrong direction and you didnt, for that thank you, there are people like me looking for a place like home on disability and need help... You are very very informative so thank you very much

Sat, 05/21/2016 - 23:51 Permalink

In reply to by Matthew (not verified)

Hi Matthew,
It's actually a misconception that having a disabling condition makes you unable to perform any type of work, because you are "disabled". Being able to make improvements to their own home does not mean that the person would be able to do it full-time as a job.

Mon, 05/23/2016 - 09:44 Permalink

In reply to by Shell (not verified)

Hi Shell,
Thank you for pointing that out! Habitat for Humanity may be able to offer alternative arrangements for people unable to do construction work.

Tue, 01/31/2017 - 14:18 Permalink
JOSHUA (not verified)

I am interested in purchasing the home I live in. The home is a multi family house with 3 units. All levels are currently occupied by tenants including myself. My question is since I the home I want to purchase is a rental, and the tenants pay rent monthly, would that increase my chances of purchasing. Since my income is not the only source coming in to pay the mortgage. I am also on SSI receiving 733 each month.

Tue, 05/31/2016 - 16:40 Permalink

In reply to by JOSHUA (not verified)

Hi Joshua,
I'm not sure about increasing your chances of purchasing the house, but I know that the income you would get from the rental property may be counted against your income and resource limits after the house's purchase.

Tue, 05/31/2016 - 16:58 Permalink
Joshua (not verified)

In reply to by Bryan

Thanks. If you were me, what would be the first step in the process. I'm completely clueless(1st timer) but eager to get the process started.

Fri, 06/03/2016 - 14:43 Permalink
Juls (not verified)

I'm on a ssi and my payee that gets my money from a ssi puts all my ssi money to rent so I have nothing no money at all for the rest of the month and my 2 sons going to collage live w/me and the payee lives there to he gets money from 3 other jobs he clams he pays everything else bills and when he gets mad I have to leave the home I pay for because the cops will take me to jail he tells them it's his house but I pay all the rent every month I need to get away and I wish I could just buy a home that is mine my disability I need help w/all paper work

Wed, 06/08/2016 - 09:15 Permalink

In reply to by Juls (not verified)

Hi Juls,
I think the first thing to do would be to contact the SSA and have them change your payee, as it sounds like he may be abusing your benefits. I would find someone you would trust with the money and then have them become your payee.

Wed, 06/08/2016 - 15:42 Permalink
a Parker (not verified)

I am out of work due to surgery. My son gets ssi of $756 a month and he wants to buy a house for me and him. Is he able to?

Fri, 06/10/2016 - 09:11 Permalink

In reply to by a Parker (not verified)

Hi Parker,

Unfortunately, a home may be challenging to buy if you are on SSI benefits. You can have one home of any value, but you may have more than $2,000 in assets, which makes it hard for people to purchase a new home.

Fri, 06/10/2016 - 14:50 Permalink
Charlene (not verified)

In reply to by vmw

I want to buy a home and I'm on daughter is in ssi and I would like to put ì in trust for her..I will be using my ssi money and hers..can I do this..I've already been approved for a mortgage

Thu, 02/02/2017 - 18:08 Permalink
Macculeuse mondesir (not verified)

I'm a mother of 3 kids and I am a disabled woman for the past 2 years I would like to own my house because I been renting for the past 18 years I would like to know what the first step to take.

Sun, 06/12/2016 - 22:29 Permalink

In reply to by Joanne (not verified)

Hi Joanne,
I honestly have no idea if that would affect his SSI or not! I think it would depend on who handles the money--if he receives the loan payment, his SSI could be affected.

Fri, 06/17/2016 - 15:02 Permalink
Elma lannager (not verified)

I am currently on ssdi and only get approximately $1200.00 a month. I have both physical and my disabilities. Most of my needs are home safety and ada needs in my home. Ie door ways that fit for walker, wheel chairs low cupboards etc. I cannot use items like step stools due to a bad balance/vertigo issues stemming from a vestibular incident in 2005. I only need something bigger than a tiny house and one floor so there are no stairs to climb. Much of your info is sound. My credit is poor but use a representative payee for the last 6 yrs. My question is then is my income too low? If so what other options are there for me? Where I am living now is structurally unsound and fire and safty hazard and is not designed for physical safety. Help! If you can. Thank you.

Sun, 06/19/2016 - 11:25 Permalink

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