Jeff Gitlen, CEPF®, is the director of growth at LendEDU. He graduated from the Alfred Lerner College of Business and Economics at the University of Delaware.
Buying a house is a key part of the American dream. But if you have a disability, you may find it harder to afford to buy and retrofit a home to accommodate your needs. If you can’t work or you face significant medical expenses, you might not be able to qualify for a traditional mortgage or provide a 20% down payment.
Home ownership for people with disabilities is often important because many rentals lack accessible options. Buying a home may be the best option if you need unique physical accommodations to your living spaces.
Several programs can help you purchase a home and retrofit it to accommodate your disability, improving your quality of life.
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There are a lot of pros and cons of home ownership in general, but there are also some particular benefits and drawbacks to consider if you have a disability.
One benefit of buying a home is that you can renovate your space to accommodate your particular needs. For example, if you need a special shower, lower counters, ramps, or wider doors, you can make those changes without having to depend on a landlord or public housing authority to do it.
This can be particularly important to those who live in areas where there isn’t a lot of accessible rental housing options, or to those who have unique accessibility needs. In some cases, having your own place is one of the only ways that you can live with more independence and comfort.
Other benefits include the ability to build wealth and equity through the asset of your home that you can someday use to access cash through a home equity line of credit or to sell and support your retirement.
Unfortunately, there are a lot of downsides . The first is that you are responsible for all the maintenance. If something breaks down, you’ll have to pay for it. If you have a yard, you will either have to take care of it yourself or pay someone to do so. Depending on your disability and income, it could be difficult for you to do this. These additional expenses could be especially difficult if you are on a limited income.
If you have several emergency expenses and not enough savings, you could struggle to pay your mortgage and lose your home. It could then become difficult for you to find another place to live at the last minute. You’ll likely then have bad credit and many landlords check your credit before renting to you.
Another downside is that making changes to your home to improve your accessibility could potentially decrease the resale value of your home. While you might luck out and find a buyer who needs similar accommodations, those who don’t need such accommodations might not want to pay as much if they are must renovate the home by, for example, raising the counters or changing the shower or bath.
If you have a disability and want help buying a home, there are a number of funding sources to help you.
Depending on your personal situation, you might qualify for Social Security Disability Insurance of Supplemental Security Income. These government benefits are designed to help provide you with income if you become disabled. Supplemental Security Income is for anyone who has a financial need and is disabled, whereas Social Security Disability Insurance is for those who paid Social Security taxes on their income and then became disabled.
To qualify, you must meet Social Security’s definition of disability and apply for benefits. SSI benefits can be up to $750 per month for individuals and $1,125 for couples. SSDI can be up to $2,788 per month. These funds aren’t earmarked for housing, but they can help pay for your mortgage.
The Department of Housing and Urban Development (HUD) was set up, in part, to make home ownership easier and more accessible. They have a few different programs that could help disabled homeowners. The Homeownership Vouchers Program (Section 8) allows those who need housing vouchers to use them to pay their mortgage or help them purchase a home rather than just for renting.
Another program that could help people with disabilities is the Federal Housing Administration (FHA) loans, which provides mortgage insurance for loans from lenders that are partners in the FHA loans program. By providing insurance, the FHA ensures that lenders can give borrowers lower interest rates since their risks are mitigated. These lower rates mean that homeownership is more accessible to people who are low-income, including disabled people who qualify.
If you were injured while serving in the military, then the U.S. Department of Veterans Affairs can potentially help you with a grant or loan to buy or build a home that is adapted to your needs. The VA has Specially Adapted Housing Grants or Special Housing Adaptation Grants to help you buy, build, or remodel a home.
Fannie Mae is a government-sponsored, for-profit company that was set up to help Americans access affordable mortgages. Fannie Mae has specialty programs for borrowers who have disabilities and provides loans with flexible underwriting criteria to help more disabled people qualify for their HomeReady Mortgage Program.
If you’re a veteran who was injured in Iraq or Afghanistan, you might meet the criteria to get help with an adapted home via the non-profit Homes for Our Troops. This organization helps veterans who were injured after September 11, 2001. It donates newly constructed and specially adapted custom homes for veterans to be able to live independently. This organization mostly works with veterans who have had multiple limb amputations, partial or full paralysis, or severe traumatic brain injury.
Habitat for Humanity helps people who have low incomes fulfill their dream of home ownership. With organizations in almost 30 states, Habitat for Humanity does not specifically focus on disabled homeowners, but disabled homeowners certainly may qualify. This organization is known for requiring that people who get houses put in ‘sweat equity’ and help build homes, but the labor doesn’t have to be physical. You can deliver ‘sweat equity’ in other ways to qualify.
If you’ve never owned a home before, you might be overwhelmed with the idea of applying for a mortgage. If you choose not to go with one of the programs above that helps you to pay for a home through a special program, then you might decide to approach a lender directly. Here is what the process will look like:
The first part of your mortgage application process involves choosing a lender. Shop around. You can use our guide to the best mortgage lenders as a starting point.
If you want lower rates, consider lenders who offer FHA loans, or lenders who are known to work with people with disabilities on a limited income. If you only work part-time or if you don’t work, you might struggle to find a lender who is willing to provide you with a mortgage.
Getting pre-approved before going out and shopping for your new home is critical. That’s because you will know what your budget is, which will ensure that you don’t look at homes over your budget. While a pre-approval isn’t written in stone, it gives you a better idea of how much you’ll qualify for.
Looking for a home is the fun part of buying property. This can also be tricky if you have a disability that requires your home be adapted to your disability or can be easily adapted. If the property needs to be adapted with renovations, factor those costs in. Once you find the house of your dreams, you can make an offer and see if it’s accepted by the sellers.
Once your offer is accepted, you must finish your loan application. To do this, you might need to provide more information or documents and sign all sorts of papers. There might be slight differences between what you were pre-approved for and how much the lender is willing to lend to you.
Before you can close on your mortgage or your new home, you’ll need to have someone inspect the home to confirm that it is up to code with no major problems. This will often be required by the bank, but it benefits you because it will protect you from problems down the road. If your home fails the inspection, you can back out of the offer or offer less.
There are many things involved in closing on the sale of a house including closing on the mortgage, signing papers to transfer ownership, and possibility even getting mortgage insurance or life insurance if your bank requires it. Be sure to budget for closing costs which average around $3,700, according to Zillow.
When it comes to home ownership for people with disabilities, there numerous laws and legislation that will protect you against discrimination. Here’s what you need to know:
This legislation protects you from homeowners or landlords that won’t rent or sell to someone because they’re disabled or who want to provide a different set of rules for those with disabilities. It also protects against zoning or land use policies that could prevent disabled people from living in certain areas.
The right to ‘reasonable accommodations’ is a part of the Fair Housing Act that will help you when you buy a home. For example, if you buy into a condo, you could request reasonable accommodations around a parking space that has more room for you to get in and out of your vehicle or is closer to the elevator.
Some condos or homeowners association have ‘no pets’ policies or limit the size of pets. But if you have an assistance animal, you are allowed by law to have your service animal with you because it is considered a reasonable accommodation.
Some land use and zoning practices can be discriminatory to people with disabilities. For example, your community might require that all homes be set back a certain number of feet from the street, but you might need to build a ramp. The good news is that they cannot legally prevent you from building the ramp because it’s a reasonable accommodation. Most towns will have the option of applying for an exemption, although they might have rules regarding how you can build your ramp, which could be more costly.
Laws differ depending on where you live. Some laws might be working for your protection, while others might be not provide you with reasonable accommodations. Before you buy a home, look into the laws near you.
For people with disabilities, buying a home is very feasible. It could greatly improve your quality of life and independence. However, there are a number of financial risks involved in such a big investment. It might not be right for you. Consider all the benefits and downsides, and talk to other disabled people who own homes to make sure that you’re making the right decision.
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