SSI and Reverse Mortgages
Deborah Nance wrote an excellent article on Social Security Income and if and how it could effect your Reverse Mortgage. This is information that all Older American's as well as Realtors and Fianancial Advisors need to know.
Thank you Deborah for the great content!
PS: I miss you!
A reverse mortgage does not have to affect a client/clients on Supplemental Security Income benefits. Here’s what the Social Security Administration has to say about it on their website.
In my opinion, and from casual conversations with personell at Social Security and in the reverse mortgage industry, as long as you spend the loan proceeds in the month you receive them, the funds will not be counted as a resource.
I always recommend that the homeowner consult with their SSI representative at Social Security and I would caution the homeowner to only take their reverse mortgage proceeds in the form of a line of credit, monthly tenure payments, or small term payments - and to be sure that they will spend those funds in the month they are received. I also give my clients a copy of this booklet about SSI and print out the linked webpage here, for them to show to their SSI representative.
It would make perfect sense for an older homeowner on SSI to use a reverse mortgage line of credit to access funds twice a year to pay for the property taxes and once a year to pay for the homeowners insurance and occasionally for the large unexpected expenses that come up. Regular maintenace items and home improvements geared toward helping seniors to “Age In Place” would be prudent expenses to pay for with a HECM Line of Credit.Here is a link to an article from the California Advocates for Nursing Care Reform regarding reverse mortgages and SSI.Thank you for taking the time to read this article and I look forward to your comments and feedback.
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