Buying a house while on disability benefits is possible, and your home won't count against SSI resource limits. Here's what you need to know about becoming a homeowner on SSI or SSDI.
In this article, we'll cover:
- Can you qualify for a mortgage?
- How homeownership affects your benefits
- Mortgage options for disability recipients
- Down payment assistance programs
- Things to consider before buying
Can You Qualify for a Mortgage?
Disability income counts:
- SSI and SSDI are stable income
- Lenders can use it for qualification
- Must be likely to continue 3+ years
- Need documentation from SSA
What lenders look at:
- Income amount and stability
- Credit score
- Debt-to-income ratio
- Down payment
- Employment history (if working)
Documentation needed:
- SSA benefit verification letter
- Bank statements
- Tax returns (if applicable)
- Proof income will continue
Challenges you may face:
- Income may be lower than traditional buyers
- May need to look at affordable homes
- Credit history matters
- May need larger down payment
How Homeownership Affects Benefits
SSDI recipients:
- No impact on benefits
- No asset limits for SSDI
- Can own any value home
- Benefits continue normally
SSI recipients:
- Home is EXEMPT from resource limit
- Your home doesn't count toward $2,000
- Can be any value
- Must be your primary residence
What's excluded for SSI:
- The home you live in
- Land the home is on
- Related outbuildings
- Property essential to residence
What could affect SSI:
- Rental income from home (if applicable)
- In-home living arrangements
- Changes in living situation
- Utility costs affect benefit calculations
Mortgage Options
FHA loans:
- Lower down payment (3.5%)
- More flexible credit requirements
- Disability income accepted
- Mortgage insurance required
VA loans (if veteran):
- No down payment
- No mortgage insurance
- Competitive rates
- Disability income accepted
USDA loans:
- No down payment
- For rural areas
- Income limits apply
- Disability income counts
Conventional loans:
- May need higher credit score
- 3-20% down payment
- Disability income accepted
- May have better rates
Special programs:
- State housing finance agencies
- Disability-specific programs
- First-time buyer programs
- Nonprofit housing organizations
Down Payment Assistance
Programs to explore:
State programs:
- Most states offer down payment help
- Grants or low-interest loans
- Income limits apply (often qualify on disability)
- Contact state housing agency
Local programs:
- City and county programs
- Neighborhood programs
- Community development programs
- First-time buyer initiatives
Nonprofit programs:
- Habitat for Humanity
- NeighborWorks
- Community land trusts
- Disability-specific organizations
Federal programs:
- HUD housing counseling
- Good Neighbor Next Door (if eligible)
- Section 8 homeownership (some areas)
How to find programs:
- Search "[your state] down payment assistance"
- Contact HUD-approved housing counselor
- Ask mortgage lenders
- Check with disability organizations
Costs Beyond the Mortgage
Budget for:
- Property taxes
- Homeowner's insurance
- Utilities
- Maintenance and repairs
- HOA fees (if applicable)
How much can you afford?
- General rule: 28% of income for housing
- Include all housing costs
- Leave room for other expenses
- Be conservative on disability income
Example budget on $1,200/month SSDI: | Expense | Amount | |---------|--------| | Mortgage + taxes + insurance | $400-500 | | Utilities | $150-200 | | Maintenance | $50-100 | | Total housing | $600-800 |
SSI-Specific Considerations
Your home is protected:
- No matter how much it's worth
- As long as you live in it
- Land it sits on included
- Doesn't count toward $2,000
Saving for a home on SSI:
- Challenging with $2,000 limit
- Consider ABLE account
- PASS plan may help
- Down payment assistance critical
After buying:
- Home improvements exempt
- Repairs and maintenance okay
- Building equity is safe
- Can leave home to heirs
Rental income caution:
- Renting rooms creates income
- Could affect SSI amount
- Report any rental income
- May still be beneficial overall
Steps to Homeownership
Step 1: Get financial ready
- Check credit score
- Pay down debt if possible
- Save what you can
- Get benefit verification letter
Step 2: Get pre-approved
- Talk to multiple lenders
- Explain disability income
- Get pre-approval letter
- Know your budget
Step 3: Find down payment help
- Research assistance programs
- Apply for programs you qualify for
- Work with housing counselor
- Combine multiple programs if possible
Step 4: Find a home
- Work with understanding realtor
- Look within your budget
- Consider accessibility needs
- Home inspection essential
Step 5: Close and move in
- Complete mortgage process
- Set up utilities and services
- Report new address to SSA
- Enjoy your home!
Things to Consider
Pros of homeownership on disability:
- Stable housing
- Build equity
- Home is exempt from SSI limits
- Fixed housing costs (mostly)
- Freedom to modify for accessibility
Cons/challenges:
- Maintenance responsibility
- Tied to one location
- Repairs can be expensive
- May need help with upkeep
- Property taxes can increase
Questions to ask yourself:
- Can I afford all housing costs?
- Can I maintain a home?
- Do I plan to stay in the area?
- Is renting actually better for me?
How Purple Helps
Purple supports your homeownership goals:
- Track your budget and savings
- See all your income in one place
- Get benefits early to pay bills on time
- Build positive banking history
- No fees eating into your down payment fund
With Purple, you can manage your finances as you work toward homeownership.