Applying for Medicaid; No equity in the home

by Bill
(Pennsylvania)

What should you do about your home if you are in a nursing home, applying for Medicaid, already spent down any money in the bank, and the home value is even or underwater? Should you attempt to sell or just walkaway from the home?

Comments for Applying for Medicaid; No equity in the home

Average Rating starstarstarstarstar

Click here to add your own comments

Oct 23, 2012
Rating
starstarstarstarstar
home mortgage and Medicaid
by: K. Gabriel Heiser

If a person is paying a mortgage on a house and then has to move to a nursing home, the Medicaid rules do not permit a deduction from the monthly income of the homeowner to continue the mortgage. Thus, unless family members chip in to pay the mortgage, the loan will default and the bank will foreclose on the house. This will have no effect on the homeowner's Medicaid eligibility if the home is "underwater," (i.e., the loan exceeds the value of the house), but if the value of the house exceeds the loan, then suddenly the nursing home resident will receive a lump sum of cash upon sale of the house, which will cause disqualification of the resident until that money is spent down or otherwise disposed of.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Medicaid Questions.

Subscribe to
Estate Planning Hub


Your First Name


Your E-mail Address

We keep this private.



Follow the Estate Planning Blog.




--by Beth Heikkinen
Marquette, Michigan
I just want to thank you for this site. It answered my questions. I think many people that do research on the net take it for granted and when they find what they are looking for they forget "someone put time, money, etc into providing me with this information."

Thank you!


Like This Site





Visit Our Social Media Pages

Become a Fan of Estate Planning Hub on Facebook Follow EstatePlanningHub on Twitter Follow EstatePlanningHub on Google+ Subscribe EstatePlanningHub Video on YouTube

Get a PDF version of this website and its sister site here.