Since the new cost-of-living increase was made public yesterday, millions of people who get Supplemental Security Income (SSI) are not sure if they want to buy a house in 2024.
People with disabilities who do not have a lot of money or means can get help from the SSI program. The Social Security Administration decides how much money SSI users can get each month and what assets they can have.
Because of these rules, beneficiaries need to be careful when buying big things that could put their SSI enrolment at risk by putting their assets over the limit.
Could SSI recipients buy a house in 2024 without compromising their SSI increase for next year?
People who get SSI may be worried that buying a house will make them ineligible for benefits, since the program limits how much money users can have.
At least this rule has some exceptions, and your home is not one of them. It does not count towards the maximum amount of assets you can have. So, people who get SSI can use their benefits to buy a house without losing them.
Having said that, the chances of success are not all the same.
Kathleen Romig, who is in charge of Social Security and disability policy at the Centre on Budget and Policy Priorities, says that your main home and main car are not counted against you. However, it would be very hard for someone on SSI to buy a house.
People who are single can only get $914 a month in SSI payments, but married couples can get up to $1,371 a month. That being said, this amount goes down if you make more than $65 a month or get more than $20 a month from benefits like Social Security.
As per the CBPP report, the normal monthly payment in December 2022 was $621. Due to this, if these benefits are your main source of income, it will likely be hard for you to make your monthly mortgage payment.
The program’s wealth limits are another big reason why people with SSI can not buy a home. Usually, people who want to get a mortgage have to pay at least a 3% down payment and closing costs equal to 3% to 6% of the loan amount.
Because of this, the money you will need to buy a $200,000 house could be between $12,000 and $18,000. Even if you can get a mortgage with no down payment, you still have to pay at least $6,000 in closing costs.
The Supplemental Security Income program, on the other hand, only lets people with $2,000 in assets keep getting benefits. Two people can not have more than $3,000 together.
According to Romig, SSI is also the main source of income for most people who receive it. It can be hard to keep even small amounts of money.
Romig also said that it is unlikely that people who get SSI would have enough money to make a mortgage payment and a down payment, let alone all the other costs that come with owning a house.
How can beneficiaries find affordable housing on SSI?
Another problem for these recipients who want to buy a home is that there is a serious lack of affordable housing across the country.
The US Census Bureau and the Department of Housing and Urban Development just said that the average price of a home in the US right now is $431,000.
There are not that many entry-level homes for sale, even though they cost a lot less than this in many places.
Peggy Bailey, vice president for housing and economic security at CBPP, says that there are not many affordable single-family houses in many areas right now, even if we made it easier for people on Supplemental Security Income (SSI) to buy a home.
Freddie Mac thought that the United States would be 3.8 million units short of a suitable housing supply in 2021.
They also thought that the shortage would be much worse for entry-level or starter houses, which are smaller, cheaper homes that first-time homebuyers with limited budgets often buy.
