Will I Lose My SSI If I Buy a House? Discover How to Keep Your Benefits and Own a Home

Will I Lose My SSI If I Buy a House? Discover How to Keep Your Benefits and Own a Home

Wondering, "Will I lose my SSI if I buy a home?" This guide clarifies how homeownership can affect your SSI benefits and provides key strategies for managing resources.

Marcio VasconcelosMarcio Vasconcelos

Published on May 18, 2024

Will I Lose My SSI If I Buy a Home?

Supplemental Security Income (SSI) is a vital support program for individuals with limited income and resources. Naturally, if you're an SSI recipient considering purchasing a home, questions arise about how this might impact your benefits. 

This guide will answer the primary question, "Will I lose my SSI if I buy a home?" while also providing insights into related aspects of SSI and homeownership.

Let's dive into the topic to give you a comprehensive understanding of how SSI and homeownership interact.

Can You Own a Home on SSI?

The short answer is yes, you can own a home on SSI without losing your benefits. That is because your home (also referred to as your "principal place of residence") is considered an exempt resource. 

This means it does not count against SSI’s resource limits, which are $2,000 for an individual and $3,000 for a couple. There is no limit to the value of your home for it to remain exempt.

According to the official SSI page, are exempt resources:

  • Property that you own and use for business purposes, like a gas station, farm, or beauty salon.
  • Personal items used for work, such as tools, uniforms, or safety gear.
  • Government permits that grant permission to generate income, such as commercial fishing licenses.

Key Considerations:

  • Joint Ownership: If you co-own a home with someone who is not your spouse, the value of your ownership share might count as a resource if it exceeds SSI limits.
  • Rental Property: Owning a second property or rental property could affect your benefits if it is not considered essential for self-support.

Will I Lose My SSI If I Sell My House?

Selling a house can impact your SSI eligibility if not managed correctly. If the money from the sale exceeds the $2,000 (individual) or $3,000 (couple) resource limit, your SSI benefits may be suspended. However, you have 3 months to use the proceeds to purchase a new home.

Also, If you plan to buy another home, the proceeds will remain exempt for up to 3 months while you look for a new house. In case the sale proceeds exceed SSI resource limits and are not used to buy another home within the 3-month window, you may temporarily lose your benefits. Your SSI benefits can resume once you meet resource limits again.

However there are some alternative strategies:

  • Spend-Down Approach: Use the sale proceeds to pay for medical expenses, debts, or other exempt resources.
  • Special Needs Trust (SNT): Transfer the proceeds to an SNT, which can protect SSI eligibility.

What Property Can You Own on SSI?

In addition to your primary residence, SSI recipients can own various other properties without losing their benefits:

  • Household Goods and Personal Property: Items like furniture, appliances, clothing, and personal effects are exempt.
  • Vehicle: One vehicle used for transportation is exempt, regardless of value.
  • Burial Spaces and Funds: Burial spaces for you or your immediate family are exempt. You can also have up to $1,500 in a burial fund.
  • Life Insurance: Life insurance policies with a combined face value of $1,500 or less are exempt.
  • Property Essential for Self-Support (PESS): Property used for self-employment or income generation (e.g., tools, equipment, farmland) is exempt.
  • ABLE Accounts: Achieving a Better Life Experience (ABLE) accounts allow individuals with disabilities to save up to $100,000 without affecting SSI benefits.’

What Income Is Not Counted for SSI?

SSI has strict income limits, but not all income is counted towards eligibility. Here are some common income exclusions:

  • The first $20 of most income is excluded each month.
  • The first $65 of earned income (wages or self-employment) is excluded, plus half of the remaining earned income.
  • Supplemental Nutrition Assistance Program (SNAP): Food assistance benefits are not counted.
  • Federal and state tax refunds are excluded for 12 months.
  • Educational assistance is excluded if used for tuition, fees, or other educational expenses.
  • Small gifts or inheritances up to a certain limit.

Finding Affordable Housing on SSI

Finding affordable housing on Supplemental Security Income (SSI) can be challenging due to limited financial resources. However, with the right strategies and programs, it's possible to secure suitable and budget-friendly accommodations. Here are some practical tips:

1. Apply for Housing Choice Vouchers (Section 8)

The Housing Choice Voucher Program, also known as Section 8, is a federal initiative that helps low-income individuals and families afford decent housing.

How It Works:
The program provides rental subsidies directly to landlords on behalf of eligible individuals.
Recipients are generally required to pay 30% of their income towards rent.

Eligibility Criteria:

  • Income must fall below a certain level based on household size.
  • Must be a U.S. citizen or have eligible immigration status.
  • Cannot have a history of serious criminal activity.

Application Tips:

  • Visit the U.S. Department of Housing and Urban Development (HUD) website to find your local Public Housing Authority (PHA).
  • Due to high demand, waiting lists can be long. Apply as soon as possible to get on the list.
  • Ensure your application includes all necessary documents, such as proof of income and identification.

2. Explore Public Housing Programs

Public Housing is another government program that provides affordable rental housing for low-income individuals.

How It Works:

  • Public housing units are owned and managed by local PHAs.
  • Rent is generally based on 30% of the tenant's adjusted gross income.

Eligibility Criteria:

  • Income limits based on family size.
  • U.S. citizenship or eligible immigration status.
  • Good rental history.

Application Tips:

  • Reach out to your local PHA for availability and eligibility requirements.
  • Gather proof of income, identity, and immigration status.

3. Consider Nonprofit and Charitable Organizations

Nonprofit organizations also offer support for individuals struggling to afford homeownership, providing resources like down payment assistance and free homeownership education. Some examples include:

  • Habitat for Humanity: Offers low-cost homeownership opportunities to qualifying families.
  • Mercy Housing: Provides affordable rental properties across the U.S. to low-income individuals.
  • Catholic Charities: Offers rental assistance and affordable housing options through local chapters.

Application Tips:

  • Search for local nonprofit organizations focused on housing assistance.
  • Contact the organizations for application guidelines and eligibility criteria.

4. State Housing Assistance Programs

Many states offer additional housing assistance programs beyond federal aid. Some states provide emergency rental assistance or ongoing subsidies to low-income residents.

There are also properties developed under LIHTC (Low-Income Housing Tax Credit) which often offer reduced rents to eligible tenants.

Application Tips:

  • Contact your state housing agency or authority for information on available programs.
  • Review the income eligibility criteria for each program.

5. Explore Shared Housing Options

Co-housing or shared housing is an alternative way to reduce housing costs. Renting a room in a shared apartment or house, for example, can be more affordable than leasing an entire unit.

Seniors can also share housing arrangements to provide mutual support and reduce costs, and online platforms can help find compatible roommates.

6. Utilize Other Government Assistance Programs

Make the most of other assistance programs to free up more income for housing.

  • Supplemental Nutrition Assistance Program (SNAP): Food assistance benefits can help reduce grocery costs.
  • Medicaid: Health insurance coverage for low-income individuals to reduce healthcare expenses.
  • Utility Assistance Programs: LIHEAP (Low-Income Home Energy Assistance Program) provides help with utility bills.

Can a Person on SSI Inherit a House?

Yes, a person on SSI can inherit a house, but there are important considerations to keep in mind. If the inherited house becomes your primary residence, it is considered an exempt resource under the primary residence exemption. 

However, inheriting a second home, such as a rental property or vacation home, could cause you to exceed SSI resource limits. To protect your eligibility, consider setting up a Special Needs Trust (SNT) to hold the inherited house or property, allowing you to benefit from the inheritance while safeguarding your SSI benefits. 

Remember that any inheritance must be reported to the Social Security Administration (SSA), as failing to do so could result in penalties or a loss of benefits.

Conclusion

Buying a home on SSI is possible without losing your benefits if you follow the program’s rules and understand the exemptions available. It's crucial to manage your resources carefully and seek guidance from a financial advisor or attorney specializing in disability benefits to ensure compliance. 

With careful planning and the right strategies, homeownership can be a reality while maintaining essential SSI benefits. Count on the expertise of Home Shift Team to navigate through the real estate universe with confidence and ease.

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