Buying a house on Medicaid ?

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SixOfWands

Mon, Oct 04 2021, 5:02 pm

amother [ Cadetblue ] wrote:

I don't have time now to respond (and not sure if I will have anytime soon) I just want to point out that there are many things incorrect in this post, so OP, you should research a bit more.

For example the above mentions only 2k in liquid assets in NY. Inaccurate.

In any case, OP you should call an organization who helps with medicaid enrollment, for example UJO and they know all the answers to your questions.

Medicaid eligibility requirement for families with children under the age of 18 differs from eligibility for people over 65, and certain disabled people. Only the latter (65+, disabled) have asset limits.

amother

Cadetblue

Mon, Oct 04 2021, 5:07 pm

SixOfWands wrote:

Correct. I mentioned that above.

amother

Mon, Oct 04 2021, 5:40 pm

amother [ Green ] wrote:

I'll tell you what we did. It may not be practical but we saved up with our lower income enough of a down payment over many years that our mortgage was lower and approved.

If you dont mind me asking,how did you save up with your low income for the downpayment, while the prices of the houses increased over time ?

amother

Mon, Oct 04 2021, 5:46 pm

[delete]

amother

Mon, Oct 04 2021, 5:49 pm

Amarante wrote:

You are posting the improbable. If someone has a high paying position they generally don't decide to quit in order to qualify for government assistance. I guess there are unusual people who decide to do a complete life change but in general most people would prefer to earn enough so that they can lead a comfortable life style. But in general unless something terrible happens (loss of job; death without life insurance; debilitating illness), most people with high salaries do not voluntarily decided to make a lower salary because the benefits are no longer worth it to them versus what they are earning.

Isn't that the reason why most people decide to go for a long term solution - e.g. many times people write that if they take a promotion they will earn a bit more than what qualifies for benefits. However, they decide to take the short term financial hit because in a few years they will be rising in their career and no longer have to worry about government assistance.

Because of the simple math, it is unlikely that anyone living in an area where housing is expensive would have an income that is low enough for Medicaid and high enough to qualify for a mortgage. Perhaps in a very low cost area where you can buy a house cheaply - go to areas in Broome County for example and there are respectable homes for $150,000. Also many low cost areas do not have expanded Medicaid so the issue of Medicaid eligibility is moot anyway.

As others have posted, if you have Medicaid after 65, you are not permitted to have more than a small amount of assets and only a relatively small amount reserved for a surviving spouse. My understanding is that they don't kick you out of the house or make you sell it but that the government collects when the house is sold. For the most part it really isn't a factor since most people are covered for medical expenses through Medicare after 65 and so the major expense would be if someone has to go into a nursing home.

What you are saying definitely makes sense the question is what if the "high income" is just above the medicaid limit ? Not receiving the benefits and being taxed heavily might also not be worth it ? (I remember a post a while ago about middle class not being fair)

Amarante

Mon, Oct 04 2021, 6:21 pm

amother [ OP ] wrote:

Obviously without specific numbers, it is only conjecture.

However it doesn’t seem probable that someone making a borderline amount would be qualified for a mortgage to purchase a home in the tri state area.

And what are career prospects for someone at the cusp. Are they relatively new in their field ajd therefore their income will grow?

I was responding only to what I thought was an improbable scenario of someone making enough to afford a home at the normal price point of a frum neighborhood and then deciding years later to deliberately make less money solely to be eligible for Medicaid. Absent unusual circumstances, someone at that point is not voluntarily going to decrease their income so drastically because the benefit from Medicaid would be far less than the drop in their income. They could afford health insurance or do what many people do which is to work for an employer with good benefits.

In other words, it would make no financial sense to do it because they would have more money even after paying for insurance than if they lowered their income to qualify fir Medicaid.

I don’t think most people would think that a family of 8 is really able to be comfortable on $70,000 or whatever the cutoff is.

amother

Holly

Mon, Oct 04 2021, 6:37 pm

Amarante wrote:

The average price of a house in NYC is close to $800,000. https://www.propertyshark.com/.....c-all

Your mortgage should be no more than 2-1/2 to 3 times salary. So for a $500,000 mortgage on even a $600,000 house, you should make at least $160,000 a year -- close to triple the Medicaid limit for a family of 8.

And that assumes that you're not going to have a massive tuition expense for many children.

wow

Mon, Oct 04 2021, 6:57 pm

Just gonna throw it out there - some people on medicaid receive a one time down payment amount from parents or perhaps inheritance... and perhaps they get enough to take our the minimum mortgage that can technically be approved and met with an under the medicaid limit income.

amother

Mon, Oct 04 2021, 7:44 pm

wow wrote:

How do they do that ? Is the house under both their and their parents name ? I thought the amount one can receive gift as for a down payment cannot exceed $10,000 ?

amother

Mon, Oct 04 2021, 7:47 pm

amother [ OP ] wrote:

How do they do that ? Is the house under both their and their parents name ? I thought the amount one can receive gift as for a down payment cannot exceed $10,000 ?

What I have seen though is some families where one of the spouses has medicaid (and even foodstamps) while the other spouse has a high paying job,and they bought houses. I just don't know how it works.

amother

Candycane

Mon, Oct 04 2021, 8:05 pm

amother [ OP ] wrote:

Maybe they're not legally married? It sounds fishy to me though... Taking advantage of a social safety net.

amother

Dill

Mon, Oct 04 2021, 8:48 pm

amother [ OP ] wrote:

Also (assuming this is allowed) I was wondering if one could get a good paying job, get a mortgage, and after many years of paying off a nice percentage of the house mortgage go back to a lower income (with a normal plan of still paying off mortgage), and receive Medicaid ? Or is this not allowed ? I see that some have replied that you can own a house on Medicaid, and someone posted not after 65 ? Like I said originally this is not relevant at the moment now.

You only need a large enough income until the mortgage goes through.

Last edited by amother on Mon, Dec 20 2021, 4:47 pm; edited 1 time in total

amother

Mon, Oct 04 2021, 10:07 pm

Delete

amother

Khaki

Mon, Oct 04 2021, 10:33 pm

SafeAtLast wrote:

You only need a large enough income until the mortgage goes through.

Plus a few months, at least until after closing. Our mortgage broker told us that the bank can rescind their loan offer if something goes seriously awry with your income. If it drops a bit, they'd rather look away.

amother

Khaki

Mon, Oct 04 2021, 10:35 pm

amother [ OP ] wrote:

How do they do that ? Is the house under both their and their parents name ? I thought the amount one can receive gift as for a down payment cannot exceed $10,000 ?

Again, find out from your mortgage broker but we were told that we can each receive 10k from different sources. As an example, dh and I were each gifted 10k by his parents and then dh and I were also each gifted 10k by my parents. (We didn't actually do this, it's just an example.) But the total gift amounts cannot exceed a certain percentage (or possibly amount) of your down payment. I don't remember exact details so talk to a broker.

amother

Tue, Oct 05 2021, 10:58 am

amother [ Khaki ] wrote:

Specifically a broker or a bank would suffice as well ? I have been told that its better to use a bank.

amother

Cadetblue

Tue, Oct 05 2021, 11:54 am

amother [ OP ] wrote:

How do they do that ? Is the house under both their and their parents name ? I thought the amount one can receive gift as for a down payment cannot exceed $10,000 ?

If the money sits in your account for I think about 3 months they don't look where it originally came from. So parents transfer the money to the child as a gift (totally legal) and then they can wait the designated amount of time (ask a broker)

Amarante

Tue, Oct 05 2021, 2:01 pm

Many people are given down payment money to purchase their first home.

Why is this an issue assuming it is truly a gift and not a loan.

If it is a loan and not a gift, I would think the real issue is how your budget can afford both a mortgage and repaying an additional loan. In my experience, most first time home buyers have to stretch to cover housing expenses - mortgage, property taxes, maintenance, utilities, landscaping costs etc. which is why income levels are considered as well as other debt payments.

The issue might also be even worse for a frum family which has tuition expenses which aren't an additional expense for most people unless they are super wealthy sending to a private school in which case they probably have no financial issues in terms of qualifying for a mortgage.

amother

Holly

Tue, Oct 05 2021, 2:25 pm

amother [ Cadetblue ] wrote:

OTOH, if it is a loan, that has to be disclosed to the lender as a debt, so they will know that its a loan.

amother

Melon

Wed, Oct 06 2021, 8:20 pm

thought this tidbit might help some of you
https://www.6sqft.com/nyc-is-o.....ents/

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