Yes, you can buy a house on Social Security. While your Social Security income may meet the lender's income requirement, they will also review other factors, including your credit score and debt-to-income ratio (DTI), to help determine whether you can afford a monthly mortgage payment and what loan terms to offer.
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay.
Assets and Resources
If you are single, you can have up to $2,000 in assets and if you are married, you can have a combined total of up to $3,000 in assets. This includes (but is not limited to) money in checking, savings, and retirement accounts, stocks and bonds, and land or property owned.
Yes you can. Owning a small home or owning a large home does not affect the application process at all. It may or may not have some effect on ongoing SSI eligibility, however.
Generally, things that don't count toward your resource limit include: Your home and the land it's on, as long as you live there.
If the value of your resources that we count is over the allowable limit at the beginning of the month, you cannot receive SSI for that month. If you decide to sell the excess resources for what they are worth, you may receive SSI beginning the month after you sell the excess resources.
How much money can I have in the bank when I retire? The answer is simple: there is no limit on your savings. Social Security benefits are not means-tested, meaning your eligibility and benefit amount are not influenced by your accumulated wealth.
For example, if someone pays an individual's medical bills, or offers free medical care, or if the individual receives money from a social services agency that is a repayment of an amount he/she previously spent, that value is not considered income to the individual.
Where the overpayment is $2,000 or less and you file a request for reconsideration or waiver, Social Security will waive any collection of the over-payment (unless you were at fault in creating the overpayment). This is known as the SSI $1,000 Rule.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
Your benefit might be reduced if you get a pension from a government employer who wasn't required to withhold Social Security taxes. This reduction is called the “Government Pension Offset” (GPO).
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
You Will Not Lose Your Benefits by Selling Your Home
Therefore, selling a home while retired can not render you ineligible for benefits, although it could expose a larger portion of your benefits to federal and/or state income taxes.
And, age isn't a determining factor in whether you can repay your mortgage, Michele Albohn, a certified mortgage advisor at Compass Mortgage, says. "There is no reason why a senior cannot apply for a mortgage," Albohn says. "You do not have to prove that you will live 30 years to pay off the mortgage.
Since asset ownership and unearned (passive or rental) income do not threaten a recipient's SSDI benefits, buying and selling property should not cause concern.
What income counts…and when do we count it? If you work for someone else, only your wages count toward Social Security's earnings limits. If you're self-employed, we count only your net earnings from self-employment.
Benefits for insured workers and their spouses are reduced by 5.0 percent each in the fourth and fifth years of early benefit receipt. Benefits can also be reduced if there are substantial earnings in retirement or if the beneficiary is entitled to pensions from employment not covered under the Social Security system.
Unemployment compensation generally is taxable. Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.
The Social Security 5-year rule refers specifically to disability benefits. It requires that you must have worked five out of the last ten years immediately before your disability onset to qualify for Social Security Disability Insurance (SSDI).
SSDI payments are not affected by having a house, a car, money in the bank, or owning other possessions. On the other hand, many SSI clients are surprised to learn that assets do affect their benefits. Social Security will take into consideration the amount of your assets, because it is a needs-based program.
Exactly how much in earnings do you need to get a $3,000 benefit? Well, you just need to have averaged about 70% of the taxable maximum. In our example case, that means that your earnings in 1983 were about $22,000 and increased every year to where they ended at about $100,000 at age 62.
The SSA checks financial accounts to confirm SSI recipients stay within eligibility rules, using tools like the AFI system for efficient oversight. However, the updates introduced in 2024 simplify some reporting requirements and provide flexibility for individuals relying on informal help.
Payments may be suspended because the recipient has excess earnings, excess unearned income, excess resources, or a change in living arrangements. For the purposes of this book, individuals who have had their SSI payments suspended for 12 months or longer are considered terminated from the SSI program.