For Supplemental Security Income (SSI) recipients, buying a home in 2024 raises concerns about maintaining their benefits, especially after the recent cost-of-living adjustment (COLA). The SSI program, designed to support individuals with disabilities and limited financial resources, enforces strict income and asset limits to determine eligibility. Recipients need to be cautious with large purchases like homeownership, which could jeopardize their SSI benefits if these purchases push them beyond the set asset thresholds.
Can SSI Recipients Buy a Home Without Losing Benefits?
The good news for SSI recipients is that their primary residence does not count against SSI’s asset limits. According to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities (CBPP), an individual’s main home and primary vehicle are not considered assets under SSI rules. Therefore, buying a primary residence wouldn’t disqualify them from benefits. However, the financial reality for most recipients presents challenges that go beyond these asset exclusions.
Monthly Benefit Constraints
For 2024, individual SSI benefits are capped at $914 monthly, and for married couples, this limit is $1,371. But recipients who have additional income from other sources may receive less than these amounts due to SSI’s income limits. This restricted income poses a challenge, as the average SSI benefit of $621 per month (based on CBPP data from December 2022) is typically insufficient to cover a mortgage.
Asset Limitations and Mortgage Requirements
One of the biggest obstacles for SSI beneficiaries looking to buy a home is meeting the program’s strict asset limits: $2,000 for individuals and $3,000 for couples. In contrast, even the minimum down payment and closing costs for purchasing a home generally exceed these thresholds. For instance, buying a $200,000 home would require a down payment and closing fees totaling between $12,000 and $18,000, a figure far beyond SSI’s allowed asset cap. Even with a zero-down payment option, the minimum closing costs alone are around $6,000.
Given these limitations, Romig notes that most SSI recipients struggle to save enough for homeownership. For most recipients, SSI is their primary source of income, and with the limited monthly benefits, saving for a mortgage down payment or covering ongoing homeownership expenses is financially daunting.
Barriers to Affordable Housing for SSI Recipients
In addition to income and asset restrictions, SSI beneficiaries face a significant challenge due to a nationwide shortage of affordable housing. The U.S. Census Bureau and Department of Housing and Urban Development recently reported a median home sales price of $431,000, making homeownership unreachable for many Americans, particularly those on SSI. Entry-level homes, priced more affordably, remain scarce in many markets, adding to the difficulties for potential first-time buyers with limited funds.
According to Peggy Bailey, Vice President for Housing and Economic Security at CBPP, even if financial barriers to homeownership were reduced, there remains a shortage of affordable, single-family homes across the country. In 2021, Freddie Mac estimated that the U.S. housing market was short by 3.8 million units, with the deficit especially severe in the category of entry-level homes. These are precisely the types of homes that could offer a pathway to homeownership for low-income buyers.
Alternatives for Affordable Housing on SSI
Given the challenges of direct homeownership, SSI recipients may need to explore alternative housing options. Some possibilities include:
- Rent Subsidies and Section 8 Housing
Rent subsidies through programs like Section 8 can reduce monthly housing expenses for low-income individuals. These subsidies allow recipients to pay a reduced rent based on their income, with government assistance covering the rest. - Shared Housing and Cooperatives
In some areas, cooperative housing or shared ownership models may provide a more affordable entry into homeownership without the upfront costs associated with traditional mortgage financing. - Nonprofit Housing Programs
Organizations such as Habitat for Humanity offer affordable homeownership options to qualifying low-income individuals. These programs often provide housing at reduced costs, typically based on the recipient’s ability to pay, while also offering financial education resources. - Public Housing
Public housing provides low-cost rental options for qualified individuals, and while it may not offer ownership, it can provide long-term stability without risking SSI benefits.
Prospects for SSI Recipients Considering Homeownership
Despite the challenges, SSI recipients may still achieve homeownership if they can secure additional financial support or assistance programs, though this route remains difficult. For those primarily relying on SSI income, the high costs of a down payment and mortgage make traditional homeownership a significant stretch, especially when weighed against asset and income restrictions. Programs designed specifically for low-income or disabled individuals may provide limited options, but often fall short of solving the broader issue of affordability.
Can SSI recipients buy a second home?
No. SSI recipients cannot own a second home, as it would count against their asset limits and likely disqualify them from receiving benefits.
Are there any housing assistance programs specifically for SSI recipients?
Yes, SSI recipients may qualify for programs like Section 8 housing or nonprofit programs, which offer reduced rental rates or homeownership assistance. However, these programs often have long waitlists.
Can an SSI recipient inherit a home without losing benefits?
Inheriting a home may impact SSI eligibility unless the home becomes their primary residence. Other inherited assets could risk disqualification if they exceed SSI’s asset limits.
