Can You Get a Home Loan on Social Security?

If you’re living on a fixed income from Social Security, you may have given up on the idea of getting a home loan. Some lenders will reject your application outright if they don’t regard that income as sufficient to make payments. However, on a case-by-case basis, some lenders will actually welcome it. Below are some things to keep in mind when planning and applying for a home loan with a social security check.

Planning Social Security

When you retire, you must have earned 40 Social Security credits, at a maximum of 4 per year, before you can collect. As of 2017, that means earning at least $1,300 for each quarterly period. How much you receive depends on how much you earn over your lifetime and your age at retirement, up to a max of $2,600 monthly.

Strong Points for Social Security Income

Once benefits kick in, it can be seen as a very reliable income source. Payments come from the federal government, not some company or organization that may not be around in another decade. They are not subject to most taxes, are usually provided electronically, and come every month without fail, so the income is always available.

Verification of Income

When you apply for a home loan, if everything works out on paper, an approving lender need only verify that your receive Social Security Administration income. This can be done easily through tax returns, recent bank statements, and a copy of your benefits statement (form SSA-1099/1042S). If for some reason you can’t provide these, you can include other evidence in a Proof of Income letter.

Period of Benefits

A potential lender will also want some indication of how long you’re expecting to receive these benefits. As little as three years may qualify you for a mortgage. As proof, you need to provide a copy of your latest Notice of Aware letter which will state the SSA’s determination of benefits, or something equivalent expressing the same duration. You can obtain the necessary documentation through the SSA website or by visiting your local SSA office.

Can’t Be Refused

It’s actually a violation of law for a lender to refuse an FHA home loan application solely because your income comes from Social Security. If you’re legally blind or otherwise disabled, this includes SSDI (Social Security Disability Insurance). Should you have a problem obtaining or applying SSDI income to obtain credit, consult an experienced social security disability atto ey for advice. Provided your total income will cover payments on the amount you’re seeking, you should be able to secure a home loan with Social Security. In some cases, it might even improve your chances. Keep these things in mind and consult a professional if you have any questions about your qualifications or the process.