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Home-Ownership for People with Disabilities

The Not So Impossible Dream
Disability, in and of itself, is not a barrier to home ownership. The key is building the right team, along with your ability to save money, manage your debts, tap into special programs, and to be flexible. Certainly, your options will increase given the money and cash flow you can generate, but there are options for almost everyone. So long as you are focused, patient and willing to compromise, you can achieve your goals.

It is critical to distinguish between the things you can control and the things you cannot control. This is an empowering exercise that can clarify just how much opportunity is out there.

Here is what you control:
• Making the Rent vs. Own Decision
• Deciding where to Live
• How Much To Save?
• Managing Your Money
• Choosing Your Team

Here is what you don’t control:
• Loan programs available to buy a home
• Special programs to help with down payment
• Amount of benefits you get each month
• Home prices – “The Market”
• Interest rates

The Stuff You Control -- Rent vs. Own Decision
The first, and most important, consideration in the home ownership game is deciding whether owning is really right for you. With home ownership comes responsibilities, and not everyone is ready, or willing, to take those on. These include the responsibility of paying a mortgage on time every month, as well as maintaining the property (whether it is a house or a condo) in good living condition. There is no landlord to call if the toilet overflows; ultimately, you are responsible for everything.

So why take on this big responsibility? There are lots of good reasons. First, all the economic research suggest that there are three primary paths Americans have traditionally utilised to build wealth across generations. Education, small business development and home ownership are proven asset building and wealth creation paths, even if you have a disability. Even during this unprecedented downturn in the real-estate market, people who have owned their homes for long periods of time still can point to their equity or the appreciation of their homes value over the long haul. Remember, home-ownership is not a get rich quick scheme, it is a get rich very slowly plan with different ways one can implement the strategy. A second advantage to home-ownership is the tax advantages. The mortgage interest and property taxes a home owner pays are generally deductible against ones income. This is not such a big deal if one has little or no taxable income, but the deduction can provide substantial financial savings for people with employment income.

Another financial advantage to owning your home is that, generally speaking, your monthly mortgage payment will never go up. For home buyers who are well informed, and opt for a fixed rate mortgage, the monthly payment for their mortgage will always stay the same over the term of the mortgage. Imagine that, the price you pay for housing today is the same price you will pay next year, five years after that, and even 25 years after that. Compare 30 years of stable mortgage payments to the recent inflation of rents all across America. From 2006 to 2009, rental prices on average increased by more than 15%, and an additional 4.1 percent from 2009 to the end of 2010, 2011 rents rose at an estimated rate of 4.5% and an a predicted additional 3% in 2012. For those of us keeping score at home, this means an apartment that rented for $1,000 in 2006 will, in 2012 rent for $1,296.50 for the very same rental unit.

While a fixed rate mortgage will never go up, there is the possibility through refinancing, that one’s mortgage could even go down. Take for example the current interest rate situation compared to the above rental increases. In 2006, someone with good credit could acquire a 30 year mortgage at a 7% interest rate. On a loan amount of $200,000 that would result in a monthly payment of about $1,337. However, interest rates started heading down over the next few years, by early 2008, that same $200,000 mortgage could be obtained with an interest rate of just 5.5% resulting in a monthly mortgage payment of $1,136. Today, in 2012, interest rates have again declined, and people with good credit can currently secure an interest rate of 4.00% resulting in a monthly payment of only $958. Thus, the home buyer with good credit was able to reduce her mortgage payment by approximately $400 per month, as interest rates fell over the last 5 to 6 years. In early 2012, interest rates are at historically low rates, which can make it a good time to buy, but it is unlikely rates will continue to fall. People buying today, should be pleased with the rock-bottom rates currently available, making that monthly payment more affordable than ever.

Lastly, home ownership also provides an unparallel opportunity for personal autonomy and the ability to put down roots in community. No-one can tell you what color to paint your walls or force you to move. Owning a home also makes you part of the community, someone with a stake in the neighborhood, an equal property tax payer!

The Stuff You Control -- Saving Money
There are strategies for buying a home with very little savings, but the bottom line is that the more money you have available for the purchase, the more flexibility you will have in all aspects of the transaction. For one thing, it is harder to get a loan when you don’t have a lot of money available for the down payment. It is also harder to get a good deal from a seller.

Money saved to buy a home is actually used for two things: first is the down payment. This is the amount of money you will be paying up front for the house and will NOT be borrowing from your lender. Historically, this was 20% of the price of the home. Nowadays, you can buy a home with a much smaller down payment… but those kinds of transactions result in additional costs and charges. The second is something we call closing costs. Closing costs are expenses associated with buying a home NOT included in the price, such as the appraisal, home inspections, loan fees, title/escrow fees, and taxes. You should expect the total cost of these “closing costs” to be anywhere from 3% to 5% of the price of a home. So if you buy a property that costs $100,000, the buyer’s closing costs will likely be between $3,000 and $5,000.

One very important thing to remember about saving money – ALL money you have saved MUST be documented. That means it must be in a bank account somewhere. You cannot use cash for your home purchase expense if you are going to be getting a mortgage loan.

It is important to assess how to use any savings you have, and how to take advantage of loan programs that do not require a huge amount of savings or down payment.

The Stuff You Control -- Managing Your Money
Everyone knows that saving money is important…whether you are buying a house, a car, or just putting aside a few dollars to get out of town once in a while. The challenge is making it happen. There are two important concepts around money management that everyone thinking about buying a home should consider. They are budgeting and credit.

Budgeting is simply the measurement of tracking of money you bring in (from jobs, benefits, and other sources) and the money you spend (gas, utilities, groceries, etc.)
Budgeting is very important because you can’t really save for a house if you are spending more than you are bringing in. So one of the first steps towards home ownership is managing your money in such a way that you have enough money to pay all your bills each month… and ideally save a bit too. One well known savings strategy is known as paying one’s self first. If your goal is to save $100 per month, as soon as you get paid, transfer that $100 into a savings account. You will be much less likely to spend those dollars if they are in a separate, segregated savings account, rather than burning a hole in your pocket or checking account. Try it for six months, you’ll be surprised how easy it is, and just how fast the dollars can add up.

Credit is simply borrowed money. If you have a credit card, then you are borrowing money by using the card, and paying it back when you get the credit card bill. Your Credit Score is a measurement of how well you pay your bills. If you don’t pay your bills on time, don’t make the “minimum payments” or borrow too much money (exceed your credit limit), your credit score will be lower. Your credit score is very important to lenders because it allows them to evaluate if you are a “good risk”. If they are going to lend you potentially hundreds of thousands of dollars so you can buy a home, they want to be as certain as possible that you are going to make the agreed upon payments each month. The bottom line: You won’t be able to get a loan to buy a home if you have a history of not paying your bills.

There are several techniques to deal with credit problems. One is to speak to a good mortgage lender who will help you identify credit problems of which you may not be aware and advise you the best way to get them resolved. Another is to work with a local non-profit credit repair specialist… this can take time, but is a necessary step toward home-ownership.

There is a difference between having a credit problem because something is “not right” on your credit report, and having a credit problem because you haven’t paid your bills on time. If there is an error or a dispute associated with something on your credit report, your lender or a credit repair specialist will be able to help. However, if your score is poor because you haven’t been paying your bills, probably the only solution is to start paying your creditors on time, pay down high balances, and stop any over-use of credit cards.

The Stuff You Control -- Income & Cash Flow
Although it is true that people on government benefits like Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) don’t have as much control of their income as people who are working, you may be able to positively impact your income by getting a part-time or full-time job, using someone else’s income to help you, reducing other living expenses, and paying down debts.

With regard to buying a home, you should consider the following:
• Your monthly income helps determine how much of a monthly mortgage payment you can afford.
• Your maximum monthly total housing cost cannot be greater than 45% of your adjusted income… 31% or less is much better.
• People on SSI and SSDI get their income adjusted to a higher amount for home loan purposes.
• People on Section 8 (S8) don’t need as much income (more later on this).

The Stuff You Control -- Building Your Team
It is very important that you surround yourself with people who can help you achieve your home ownership goal. Generally speaking, your Realtor should be able to connect you with the appropriate lender and/or loan program for your situation, help you to find the right home, help you find the right support during the home purchase (i.e. contractors), and be there after you move in if needed.

However, for people with disabilities and their families, there are additional things you should look for. First, make sure you find a Realtor who is sensitive and responsive to your specific situation and needs. A good realtor will operate at your speed, not theirs… being sensitive to how the disability impacts your ability to evaluate property… both physically and mentally. If you are dealing with a physical disability, you may need to educate the realtor as to your specific needs. The Realtor should help preview properties, and help to determine how suitable they are access-wise… PRIOR to showing them to you. This requires your Realtor to understand the specific needs associated with your disability and how they may or may not impact your lifestyle; after all, two people who use a wheelchair may have completely different accessibility needs. Often, it is up to the buyer to clearly communicate these needs to the realtor, remember, you are the customer, and the realtor is working for you. Realtors should also be familiar with local first-time buyer programs, specific financing opportunities for people with disabilities and very low incomes, and have the ability to make referrals to contractors for accessibility modifications. Sometimes, with a little research through independent living centers and other local disability organizations, you can locate realtors who specialize in helping people with disabilities purchase their first homes. Ask your friends, members in the community and other people you know who have purchased a home, the right realtor is a critical first hire for your home purchase team.

The Stuff You Don’t Control
So far, we’ve been discussing all those things that you can impact… from savings and income, to choosing the right Realtor. But there are a number of factors outside the control of home buyers, and having a solid understanding of these limitations, and how to overcome them, is crucial to your success.

First, let’s talk about loan programs. You don’t control what loan programs are available at any specific point in time, what their terms are, or how much they will cost in interest or fees.

As of early 2012, there are basically three main home loan options available in the marketplace. First are so-called “Conventional Loans”. These are offered by banks and mortgage lenders, and typically require the borrower to provide a Down Payment of at least 10% of the purchase price. Second are “FHA” loans. FHA stands for “Federal Housing Administration”. These are loans offered by the very same banks and mortgage lenders, but are insured by the federal government. These loans are very popular because they allow buyers to provide much smaller down payments… usually 3.5% of the price, and they are typically available for people with lower credit scores. Under the FHA loan menu, there is even a program known as the 208 loan, which allows purchasers to up to 120% of the home’s value, in order to make accessibility modifications. Finally, there are “VA” loans. VA stands for Veterans Administration. VA loans are only available to veterans. But these loans can sometimes provide 100% financing… that means no down payment is required by the borrower at all!

As you consider loans and down payments you will need to have saved, it is important to remember that the down payment is not just a matter of how much money is saved in your bank account. The type of loan you get is just one part of the financing picture.

First of all, some cities, especially in larger more urban areas, offer help to buyers. You may be able to reduce your portion of the down payment to as little as 1% of the price. There are some lenders who have in-house programs that can help. You might be able to reduce your portion of the down payment to as little as 0.5% of the price. Finally, you may be able to get help from family to help with the down payment. Gifted funds are allowed on most types of loans. There are tax implications for the person providing the gifted funds, but the amount of the gift is not usually limited.

So here’s a simple scenario that works from time to time: You get an FHA loan that only requires 3.5% down. You combine that with a city program that will pay 2.5% of that, and then you get a gift from a family member for 1% of the price. Your down payment is 0%!!!

But what about those pesky closing costs? You may recall that you need 3% to 5% of the price of the property for closing costs. Well, sometimes you can use some of those same city-based programs to pay for them. And often it is possible to negotiate with the seller of the property to pay all or a portion of them for you.

A Word about Government Benefits
There is a lot of misunderstanding regarding government benefits and home ownership. Here are some facts:
1. No government benefit can be taken away because you buy and own your own home.
2. Some benefits, such as SSI and Medicaid may limit how much money you can have in your bank account each month.
3. Some benefits, such as Medicaid, may be re-payable to the government in the future.

However, it is true that the way government benefits work can impact a person’s ability to save for a down payment and plan for home ownership.

The basic dilemma is that people collecting SSI or Medicaid are only allowed to have $2000 in their bank accounts each month. That amount goes to $3000 for married couples.

The problem is that this limitation makes it hard to save for a decent sized down payment. So the home purchaser receiving benefits needs to find work-around. These include:
• Saving money in a Federally Funded “Individual Development Account” (IDA).
• Using gifted funds for the down payment.
• Using a local down payment assistance program.

Let’s discuss IDA’s a bit further. Some non-profit agencies in some communities offer savings plans for people with low incomes that are protected from the asset limit discussed above. These plans, Individual Development Accounts, are sheltered. A special bank account is set up, and all the money that is deposited to the account does not count towards the $2,000/$3,000 asset limit. And for most of these special savings plans, the non-profit agency will match your contribution. For example, if you put is $25 per month, they will contribute $25, or sometimes even $50.

IDA’s are a fantastic way to save because not only are the funds protected; you basically get “free money” as you go along. That’s pretty cool.

Typically, there ARE some limitations with IDA's. Usually the maximum savings are limited to only a few thousand dollars, also, there is usually a required period of time that monthly contributions are required... often 12 months and longer, before the money can be used for home-ownership. An additional benefit of an IDA program is that participants get to take advantage of credit repair and financial education instruction, specifically geared toward home-ownership. These mandatory classes are a fantastic additional resource for first time homebuyers, and results in very high homeowner success rates for IDA participants.

Home Ownership Success Story
Jill had always known that someday, somehow, she would own her own home. "Lots of people told me a single Mom with a disability could never own her own home, but I showed them!"

She first started by doing a great deal of research on how home-ownership might affect her benefits. It didn't take long for her to realize that both SSI and Medicaid had specific allowances for people with disabilities to own their own personal residence. From there, Jill started checking into various home-ownership programs which specifically assisted people with lower incomes.

When Jill first heard about the Individual Development Accounts, a matched savings program that helped people save money to buy their first homes, she thought it was too good to be true.

Here, was a way to both save money, and begin to work on improving her credit score, two areas she was planning to improve in her financial life.

Jill was excited, but also a bit nervous when she started her financial education classes through the IDA program. She committed herself to the long term, knowing that she had to complete the classes before she would qualify for the matched savings to begin building her down payment.

Jill learned a lot about repairing her credit, qualifying for a mortgage and the other costs associated with becoming a home owner. "By the end of the classes, I was a much more knowledgeable consumer and knew what I needed to do to buy my house".

Jill was able to raise her credit score substantially over a 19 month period, while, at the same time, she started funding her IDA account from earnings at per part-time job.

She was fortunate in finding a program that provided a 3/1 match, so for every 25 dollars she contributed to the account, the program matched with $75. With a match like this, it didn't take her long to save the maximum of $3,000 toward a down payment.

One of the benefits of a Federally Funded IDA account is that all of the money saved in the IDA account is not considered a countable asset for purposes of Federal Benefits. This allowed Jill to save more than the $2,000 allowed by the asset rules of SSI, and gave her hope that she could start saving for her dream in her IDA.

With the help of the program staff, Jill also was referred to a local realtor with extensive experience helping lower income home buyers achieve their dreams. The realtor identified a local municipality which had down-payment assistance grant funds available to help single parents purchase their first home. The grants reduced the amount of cash Jill needed to cover her down payment and closing costs, and will even be forgiven if she stays in the house for five years. Jill was also able to leverage a county program that provided a 5% grant for down payment and closing cost assistance. "It was a first come first serve program, so you bet I got signed up quickly!" she said.

By leveraging her IDA, local down-payment assistance and the County program, Jill was able to put a 20% down payment on her home avoiding the additional monthly payment of $38 for PMI. PMI or Private Mortgage Insurance is an additional fee charged to borrowers who have a down payment which is less than 20 percent of the sale price or appraised value of the home. If at all possible, it is a great idea to leverage different programs to increase the amount of your down payment. Remember, the larger your down payment, the lower your monthly mortgage payment will be!

Jill spent several months looking at houses before she found one in a neighborhood in which she felt comfortable. The house has a great back yard, was already wheelchair accessible and her daughter even has her own room.

It did take Jill almost two full years to improve her credit, save money through her IDA and find and purchase her home, but was it worth it? "You bet, she says," Jill and her daughter moved into their new home a few weeks before Christmas. This year, Jill and her daughter are not only celebrating the holidays in their own home, but they are well on their way to building a more secure financial future through home-ownership!

Section 8 Home Ownership
So far, we have been discussing ways to buy a home with low income and limited savings… rules that apply to everyone.

However, there is a special program in this country that offers a whole different home ownership pathway… and it is (generally speaking) available to people who get subsidized rent and could be of particular interest for people with disabilities receiving benefits.

Let’s start by understanding subsidized rent. The Federal department of Housing and Urban Development (HUD) helps people with very low incomes to rent property in two main ways. One is by providing subsidized housing directly. If you qualify, you can live in buildings that are run by HUD, and pay below market rent.

The other way that HUD helps people with rent is by negotiating with private landlords to rent to qualified applicants under the “Section 8” program. A person with a low income who qualifies for Section 8 (S8) rents a regular apartment or a house, and the private landlord gets paid a market value rent… but the tenant only pays a small portion…usually about a 1/3rd of the market value rent. For example, if the rental was normally $1,200 per month, the S8 tenant might pay around $400 per month… and HUD pays the landlord the rest. A person or family who uses this program is said to have a “S8 Voucher”. This voucher is what allows them to get their rent subsidized. Section 8 is a widely used, nation-wide housing program.

Some years ago, HUD offered local Housing Authority offices the option of allowing qualified applicants the opportunity to use their voucher to buy a house, instead of renting a place. HUD still subsidizes the S8 voucher holder… but instead of HUD writing a check to a landlord each month, HUD writes its check to a mortgage holder (the bank).

It is made even better because HUD has no ownership interest in the property that gets bought… it is fully-owned by the S8 voucher holder. Now, the S8 voucher holder still has to make their monthly payments, but when the loan is paid off, the house is owned ”free and clear” by the voucher holder… HUD has no further involvement. The voucher holder is no longer “on S8” but that is okay because they no longer have a mortgage to pay!

This is a fantastic idea, in principle. It is empowering, and it helps people out of poverty and into a better life circumstance.

Unfortunately, the S8 Home Ownership Program is complicated and only available in very limited locations. For Section 8 home owner information in your jurisdiction, contact your local housing authority.

Here are some of the caveats:
1. This program is only offered by a few federal Housing Authorities, check with your local Public Housing Authority to see if they offer a Section 8 Home-ownership program.
2. You must ALREADY BE a Section 8 Voucher Holder to participate in the Section 8 home-ownership program. It can sometimes take several years to get on the waiting list for a section 8 voucher.
3. To get a voucher means waiting for that one day or one week every year or two when the “waiting list is open”.
4. If you are buying a home in a place where there are lots of buyers and few people selling homes (a “Seller’s Market”), then it may take many attempts to get an offer accepted.

There is a whole process for a successful experience with S8 Home Ownership. Here are the steps that have worked for Section 8 home owners.
1. Be a Section 8 Renter. This cannot be stressed enough. No matter where you live, if you do not already have a S8 voucher, you cannot buy a home using the S8 program.
2. Contact the S8 Home Ownership Coordinator for your housing authority to register. Note that if your Housing Authority does not offer the S8 Home Ownership Program, you would need to “port” (transfer) your voucher to an area where the Housing Authority does offer the program.
3. Attend all required counseling sessions and classes.
4. Get referred by the S8 Home Ownership Coordinator to a lender for financing.
5. Work with lender to get approved for a mortgage loan
6. Select a Realtor to help you find a home

Most Housing Authorities will be able to refer you to local Realtors and lenders who can help you, but if they cannot or if you are researching this on your own, please be very careful about your lender and Realtor partners. You really want to have both a lender and a Realtor who are familiar with how the S8 Home Ownership program works in your area, and who have already established relationships with the Housing Authority staff that administer the program, and who understand the paperwork. These things will help your ultimate purchase transaction go more smoothly, and also give confidence to home sellers that you are a viable buyer of their home.

There are a few other things to consider when thinking about the S8 Home Ownership option:
• Voucher size is important. Most S8 voucher holders have a status associated with their voucher that indicates how many bedrooms, minimum, that they can have. Generally speaking, a S8 Home Ownership applicant will have more purchasing size if there are more bedrooms on their voucher.
• Even with this program and lower prices and interest rates, finding an affordable home in a desirable neighborhood may be difficult
• Buyers using the S8 program have to be very patient. From the day the buyer “signs up” for the program to the day they get the keys to their new home could be several years.
• Finally, it is difficult, but not impossible, to buy short sales or foreclosed properties with this program. In some areas where home prices are the cheapest right now, many of the homes for sale are foreclosures or short sales.

Affordability -- Looking at the Numbers
So far, we have looked at some of the issues and strategies associated with buying a home when dealing with disability and dealing with low or constrained income. But it is all just a bunch of words. So let’s look at some numbers in a couple of realistic scenarios that have helped real people with disabilities buy their first homes.

A few points of interest as you follow these examples:

First, note that programs and options change all the time, and vary by area. Check with your local lender and Realtor about what options are available in your location and in consideration of your circumstances.

Second, these examples use assumptions for interest rates and terms that were realistic in early 2012. Readers should NOT expect that interest rates and terms will be the same in future months and years. For example, interest rates on mortgages may rise in future years, and that will increase loan payments.

Scenario 1: FHA with 3% grant

In this scenario, the borrower gets a federally-insured FHA loan, but is able to obtain a 3% grant to help with the 3.5% down payment requirement.

EXAMPLE PURCHASE PRICE: $100,000
Grant from Lender for Down Payment $3,000
Gift from Family $5,000
Borrower’s Own Funds $2,000

TOTAL DOWN PAYMENT: $10,000
DOWN PAYMENT % 10%
LOAN AMOUNT $90,000

SCENARIO 1 -- BREAKDOWN OF MONTHLY PAYMENT
Principal and Interest ($90,000 loan at 4.5% Interest) $456
Property Taxes (Estimated at 1.5% of the purchase price) $125
Hazard (Fire) Insurance (Estimated at $800/yr) $67
Mortgage Insurance Premium (Reduced to $0 if down payment is 20% or more of the purchase price) $87

TOTAL MONTHLY PAYMENT $735


Scenario 2: Conventional loan combined with City-based Down Payment Assistance Program

In this scenario, the borrower gets a regular non-government insured loan in combination with a local program from their city to help with their down payment. Note that typical down payment assistance programs of this sort DO NOT require monthly payments, but instead require the borrower to pay off the loan when the sell the house and/or share some of their profits from the sale.

EXAMPLE PURCHASE PRICE: $100,000
City Down Payment Assistance $30,000
Gift from Family $10,000
Borrower’s Own Funds $2,000

TOTAL DOWN PAYMENT: $42,000
DOWN PAYMENT % 42%
LOAN AMOUNT $58,000

SCENARIO 2-- BREAKDOWN OF MONTHLY PAYMENT
Principal and Interest ($58,000 loan at 4.5% Interest) $294
Property Taxes (Estimated at 1.5% of the purchase price) $125
Hazard (Fire) Insurance (Estimated at $800/yr) $67
Mortgage Insurance Premium (Reduced to $0 if down payment is 20% or more of the purchase price) $0

TOTAL MONTHLY PAYMENT $486

Both of these scenarios result in a monthly payment that is competitive with what people pay to rent apartments and houses in most areas… and as we’ve already discussed, home ownership is in many regards the better choice for how that monthly housing cost is spent each month.

Home Ownership Success Story
David had never really thought of becoming a home-owner, thinking such dreams were likely out of reach for someone receiving SSDI. This all changed one day when he attended a home buying workshop at a local blindness organization.

"They started talking about all these programs and strategies to buy a home, and my ears perked up," he says. "I never thought someone living on a disability income could ever own their own place, so it really caught my attention."

David learned that receiving SSDI was no impediment to home-ownership.
In-fact, given that SSDI recipients have no asset limits, the process was rather strait forward.

Following the seminar, David got strait to work on his home buying plan. His first step was to check his credit score. David had always been a very responsible user of credit and always paid bills on time. His score reported by the credit agencies was very good, but the report did disclose a surprise. "There was some kind of non-payment tied to a bankruptcy on his report, but he had no idea what it was about." Eventually, after contacting the credit reporting agencies, David learned that his ex-wife's bankruptcy from eight years after their divorce was mistakenly put on his credit report.

David filed a correction request with the reporting agencies along with a letter of explanation to the bank underwriting department and soon found himself qualified for a loan. Today he keeps a rather close eye on his report and knows there are currently no negative comments.

After interviewing several local realtors, David began looking at condominiums in his price range. His realtor would pick him up at the train station, and understood he wanted to find a home near transportation and shopping.

With his realtors help combing through listings; David was able to find a suitable place in rather short order. "The place was great, hardwood floors, granite counters, all stainless steel appliances, built-in washer and dryer" - the unit met all of David's needs. Slightly smaller than his apartment, David says that the space is much better utilized, so the place actually has more usable space and feels much larger. The swimming pool and hot tub were additional accouterments not offered by his apartment complex.

David's unit - which in 2008 sold for $248,000 dollars - eventually, became his for the post housing crash bargain price of around $63,000. With his good credit history David was able to qualify for a home path mortgage requiring only a 5% down payment ($3,750 which he had in savings. This all results in a monthly mortgage payment, including taxes and home owner’s association fees, of less than $700 per month. David's rent in his dated old apartment was actually $160 per month more than what he now pays to own his home.

Today, as a very happy home owner, David continues to work toward advancing his financial future. He is working in a local internship and looks forward to transitioning to new employment soon. He is even learning new skills by participating in his home owners association meetings: yet another asset building perk of home-ownership!

Conclusion

Ultimately, whether home ownership is the right choice will depend on each individual’s personal circumstances. And there is no question that disability and reliance on benefits can be daunting challenges. But there is hope. With patience, flexibility, and just a little bit of ingenuity, the “American Dream” of home ownership can be much more than just a dream.

FAQ:

Q: If I receive SSI or Medicaid am I still eligible to own a home?

Yes, even if you receive both SSI and Medicaid, you can own your own home. Both SSI and Medicaid have provisions that allow a beneficiary to own their primary residence. While the asset limit for both programs restricts countable assets to $2,000, a principal residence is one of the exceptions to this rule. The asset limit requirements of the programs can make it difficult to save money toward home ownership, but there are several options such as an IDA or local government assistance programs, which exist to assist people receiving benefits, achieve their savings goals. The most important thing to remember is that there are many ways to structure the purchase of a home, even if you are receiving both SSI and Medicaid.


Q: Is a realtor really that important when you want to buy a home?

Yes, the right realtor can make all the difference. A good realtor will not only know the best neighborhoods in your price range, but will know what special programs a local, county, or state may have to help first-time or lower income home buyers be successful. Your realtor should have experience working and combining these programs to help you reach your goal of homeownership. A realtor works for you, and should help find the right house, in the right neighborhood within your price range. It is important to realize, that not many realtors may have experience working with someone with your specific disability. Therefore, it is up to you to clearly convey your access and location needs, as they may or may not relate to your specific disability. There may be a learning curve, but, as with all things, patience always pays off in the end.


Q: I don’t have much money to put toward a down payment, are there programs to help lower income people become home-owners?

Yes, there are many kinds of programs that assist people in becoming home-owners. Most of these programs are designed to assist first-time buyers or people with low to medium incomes. These programs vary greatly, and can be run on a local, county, State or even Federal level. A good realtor should know about all the different programs in a specific area, and should be able to direct you toward programs for which you qualify. Such incentive programs may include: down payment or closing cost assistance, lower interest financing, more lenient underwriting criteria, debt forgiveness, real estate rehabilitation credits, financial assistance for single parent households, and we have even seen one program which recruits artists to a particular community. Remember: you may qualify for more than one program, and often these incentives can be combined to provide significant savings. Often, a simple Google search mentioning a specific local can locate many of these home-owner incentive programs.

Q: I haven’t owned a home in more than 10 years; might I still qualify for one of the first-time buyer programs?

Yes, the first thing to remember is that many first-time buyer programs, despite their name, are open to people who have owned a home in the past. It is important to check with each program specifically, but generally speaking, if you haven’t owned a home in the last two to three years, you will probably qualify for some of the first-time owner programs. Once you qualify for the program, check with your bank and other local programs to see if there are other discounts, credits or educational opportunities for which you may qualify.


Pit Falls
Section 8 home ownership.
While the Section 8 home purchase is a great opportunity to buy a home, there are several factors that you should always keep in mind.
• Remember, this program is not offered by many federal Housing Authorities, check with your local Public Housing Authority to see if they offer a Section 8 Home-ownership program.
• You must ALREADY BE a Section 8 Voucher Holder to participate in the Section 8 home-ownership program. It can sometimes take several years to get on the waiting list for a section 8 voucher.
• To get a voucher means waiting for that one day or one week every year or two when the “waiting list is open”.
• If you are buying a home in a place where there are lots of buyers and few people selling homes (a “Seller’s Market”), then it may take many attempts to get an offer accepted.
• If you have a section 8 voucher, but your Housing Authority does not offer the S8 Home Ownership Program, you would need to “port” (transfer) your voucher to an area where the Housing Authority does offer the program.

Credit
It is very important to be sure you have an acceptable credit report prior to looking for a home. Your credit score will determine the kind of loan, if any, for which you qualify. The better your credit score, the less expensive and easier it will be for you to buy a home. Because it can take well over a year to clean up a questionable credit history, it is critical to first address your credit condition before you start looking for a home. There are several ways to get assistance to improve your credit. Home purchase IDA programs will provide credit repair information, non-profit credit repair organizations can also provide assistance, while your realtor may also be able to point you toward local credit repair options.

Paying your taxes and insurance
Don’t forget that your mortgage payment is only one cost associated with home-ownership. Sometimes it is easy to forget that property taxes and home-owner insurance is a recurring cost for which one must budget. Generally, professionals suggest that a new home-owner budget approximately 1.5% of the purchase price of the home to cover insurance and property tax payments for the year. Many banks offer the option of an impound account, whereby the bank collects the amounts for taxes and insurance in your month mortgage payments, thus spreading out the expense over a twelve month period. This is a great solution for many people who find it easier to pay a little more every month, and not have to worry about semiannual tax or insurance bills.

Home maintenance account
As a home owner, you are responsible for the upkeep, maintenance and repair of your home. Most professionals suggest that home buyers set up a home maintenance savings account with monthly contributions, to cover the costs of any unexpected but necessary repairs. These savings are critical for a home-owner, so that they have a financial safety net when something inevitably goes wrong.

During the home buying process, you will have the opportunity to “inspect the home”. These inspections should point out any critical issues with the property, but over time, roofs need repairs, heating and cooling systems must be maintained or replaced and things just break. Having a financial safety net to pay for these items is the smart move for a new home buyer. In some locals there are home repair insurance policies made available to new home owners. These policies provide some repairs to various home systems, for the cost of the yearly premium and small deductible. The quality and legitimacy of these programs vary greatly, be careful and ask your realtor and other real estate professionals about the prudence of investing in such a product in your area.