Can You Buy a Home while Receiving Social Security Disability Benefits?
Social Security Disability
Many people receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits are asking themselves if they can buy their own home
, or if they will have to rent for the rest of their lives. Also, the intricacies of SSDI and Supplemental Security Income (SSI) benefits are making many people wonder if buying a home will affect their benefits in the future. The answer here is that many who receive SSI or SSDI do qualify and can buy a home. It is also true that, most likely, they are going to face some difficulties.
What is SSI
SSI is a government allowance that grants assistance plus health insurance to people with low income, who are 65 or older and have a physical disability. The stipend is paid monthly and the current rate is $735 for a single person or $1,103 for a couple. With a limited income, the biggest hurdle in buying a home
is securing a down payment.
What is SSDI
SSDI is an insurance program designed to provide physically restricted people with income supplements. SSDI is supplied on both a temporary or on a permanent basis, the period being correlated with the type of disability: temporary or permanent. Unlike SSI, SSDI has no relationship with the income of the person. It is available for people younger than 65, but you must have work credits. This means that you must be able to prove that you worked during the previous years. People getting SSDI will face additional complexities if they try to buy a new home. But they are not bound by the income restrictions applicable to SSI. The major impediment is that nobody, neither the recipient neither the lender, know for how long the SSDI will last. Thus, it is hard to estimate if they have a stable income. On the other hand, SSDI benefits are usually much higher than SSI and also, SSDI has no assets limits.
How to Buy a House on SSI
While on SSI, buying a home comes with some unique challenges, the most notable being that SSI limits the amount of income/assets you can have in order to be still eligible for SSI. Is it a very fine line between having money to buy a home and having enough money to lose the benefits. SSI restricts one’s assets to $2,000 per individual. For couples, the maximum value is of $3,000. Therefore it is difficult to save money for a down payment. But we have good news. Not all assets are counted here and the most notable example is your primary residence. And better yet, we have down payment assistance programs
in the state of Nevada. This might help bridge that gap you may have in savings.
It is true that you are going to face additional hurdles when buying a house on Social Security Disability (SSDI or SSI). But we think it is possible to do it. A lender will check your credit score. Even if your credit score and income are less then perfect, there are programs that might help you to overcome these obstacles. If you get a home loan, they will not count as income and it does not reduce your benefits. For example, Fannie Mae Community HomeChoice caters to disabled individuals with limited income who are looking to buy a home. This program requires a down payment as little as $500. Also, you can check for nonprofits that could offer support. If you are on SSI or SSDI and want to buy a home, there are many resources available to you. You could start putting part of your benefits toward buying a house rather than putting them in your landlord’s pocket.
Casey Moseman knows that getting a mortgage can be a stressful and time-consuming exercise. She aims to make the process as simple as possible. She strives for you to get the best mortgage to fit your circumstances.
Casey specializes in helping people with complex financial situations and those who do not meet standard bank policy. Here at All Western Mortgage we deal with a wide variety of lenders. We know their policies back to front, as well as the hidden catches and potential problems you might face.