Homeownership and the American Dream go hand-in-hand. Yet for people living with a physical or mental disability, that dream can seem out of reach, whether it's due to low earnings or the high cost of renovations needed to make a home accessible. What's more, not all dwellings or communities are suitable for habitation by someone with a disability.
Thankfully, there are a number of programs at the federal, state, and local level that provide assistance so that you can realize the dream of homeownership even if you do have a disability.
What is disability?
More than a quarter of the U.S. population, or 61 million people, live with some form of disability, according to the Centers for Disease Control. But the term "disability" is defined in several ways depending on the context. When it comes to federal nondiscrimination laws, a person with a disability is defined as someone who "(1) has a physical or mental impairment that substantially limits one or more 'major life activities,' (2) has a record of such an impairment, or (3) is regarded as having such an impairment."
Federal law defines major life activities as:
- Performing manual tasks
- Caring for yourself
Meanwhile, in order to receive Social Security disability benefits, a person must have "a severe disability (or combination of disabilities) that has lasted, or is expected to last, at least 12 months or result in death, and which prevents working at a 'substantial gain activity' level."
You have rights
As a person with disability, federal laws provide you with protection against discrimination in most private, state, and local government and public housing as well as federally assisted housing programs. The Fair Housing Act forbids discrimination in housing and housing-related transactions because of a disability. Further, Section 504 of the Rehabilitation Act prohibits discrimination on the basis of disability in any program or activity that receives federal financial assistance.
What's more, both privately owned and publicly assisted multifamily housing built after Mar. 13, 1991, must meet design and construction requirements for the Fair Housing Act. In elevator buildings with four or more units, all units must meet these requirements. In buildings without elevators, only the ground-floor unit must meet these requirements.
Also, federal laws require housing providers to make reasonable accommodations and reasonable modifications for individuals with disabilities such as:
- Assigning an accessible parking space
- Allowing a tenant to move to a ground-floor unit
- Adjusting a payment schedule to accommodate the receipt of income assistance
- Allowing an applicant to submit a housing application via a different means than is normally required
- Permitting assistance animals in a "no pets" building for someone who is deaf, blind, has seizures, or has a mental disability. Learn more about policies around assistance animals.
Financial assistance for home purchase
Because homeownership requires a certain amount of income and assets and a documentation of creditworthiness, it's a threshold that people with disabilities can struggle to meet. First, people with disabilities earn substantially less than people without disabilities.
In addition, people with disabilities might also need to spend additional money once they purchase a home to retrofit it for accessibility, such as lowering counters, widening doorways, and installing ramps.
There are government programs available to both help you finance a home purchase as well as making modifications to a home. Here are the most common ones.
U.S. Department of Housing and Urban Development
You're probably familiar with HUD’s Section 8 housing vouchers that can be used for financial assistance to pay rent if you meet certain income eligibility requirements. HUD's Housing Choice Voucher (HCV) program allows you to use vouchers to buy a home and receive monthly assistance for homeownership expenses.
Bear in mind that local housing authorities have discretion over whether or not to offer this program. To find out whether your local housing authority participates in the program, look here.
U.S. Department of Agriculture
The U.S. Department of Agriculture (USDA) helps disabled people in rural communities achieve homeownership in two ways. First, the department guarantees mortgages made by community banks through its Single-Family Housing Guaranteed Loan Program. To be eligible, you must:
- Meet income eligibility requirements
- Live in an eligible rural area
- Use the home as your primary residence
- Be a U.S. citizen
- Meet loan obligations
- Have not been prohibited from participating in federal programs
- Purchase a property that meets program’s requirements
In addition, the USDA makes direct loans to low-income families for home purchase with below-market interest rates and longer terms than traditional mortgages. You don't need a down payment for this type of mortgage and could pay an interest rate as low as 1 percent. The payback period is between 33 and 38 years.
This program is best for people who plan to live in their home for the long haul. If you leave the property or transfer the title, you must repay part or all of your payment assistance.
You can find out if you meet eligibility requirements for both programs here.
Programs for home modification
If you already own your own home, you can apply for grants and loans from the USDA to make accessibility improvements through the Single Family Housing Repair Loans & Grants program. This program, which also goes by the name of Section 504 Home Repair program, provides loans of up to $20,000 to very low-income homeowners to improve their home. In addition, the program provides grants of up to $7,500 to elder very low-income homeowners to make health and safety improvements to their homes.
To qualify for the program, you must:
- Own your own home and use it as your primary residence
- Lack access to affordable credit elsewhere
- Have a family income below 50 percent of your area median income
- For grants, be at least 62 years old and lack the resources to repay a repair loan
Applications are accepted year-round through your local USDA office.
Federal Housing Administration (FHA) loans
Though FHA loans are specifically designed for disabled individuals, they are an excellent way to make home buying more affordable for low-income borrowers. FHA mortgages are backed by the federal government and allow borrowers to make down payments of just 3.5 percent of a home's purchase price. And the program has less stringent requirements for income and credit score than traditional mortgages.
What's more, FHA loans allow many federally backed grants and vouchers to be used as income when applying.
To qualify for an FHA loan, you must:
- Have a credit score of at least 580 (your score can be as low as 500 if you make a 10 percent down payment)
- Make a down payment of at least 3.5 percent of the purchase price
- Have steady income
- Have mortgage insurance
FHA does not make loans itself. FHA simply guarantees mortgages made by approved FHA lenders. To apply for an FHA-back mortgage, start by contacting an approved lender.
Social Security disability income
When you receive Social Security Disability Insurance (SSDI), you can use the funds to pay for monthly expenses, including payments on your mortgage. To apply for Social Security disability, you must:
- Be at least 18 years old
- Not yet receiving Social Security retirement benefits
- Have a medical condition that has lasted, or is expected to last, at least 12 months or result in death
- Have not been denied Social Security Disability Insurance benefits in the last 60 days. (If you were recently denied, you can appeal the decision and request a review.)
To qualify for Social Security Disability Insurance, you must meet certain income and asset guidelines. For a single person, you cannot have more than $2,000 in assets or $3,000 in assets if you are married. However, your home is not counted as an asset to determine eligibility.
Typically, if you are receiving Social Security Disability Insurance, you will qualify for other federal housing assistance programs due to income eligibility requirements.
Programs for disabled veterans
If you are a veteran who is disabled due to your military service, the U.S. Department of Veterans Affairs has a grant program to help with the purchase or construction of an adapted home or the modification of an existing home. The VA has two grant programs to assist disabled veterans with homeownership, the Specially Adapted Housing (SAH) Grant and the Special Housing Adaptation (SHA) Grant.
Specially Adapted Housing (SAH)
The SAH grant program provides veterans with certain service-linked disabilities to live independently in housing that's accessible up to $90,364 in 2020. Grants can be used to:
- Build a specially adapted home on land that is yet to be acquired
- Build a specially adapted home on land you already own
- Remodel a home you already own to make it specially adapted
- Pay the unpaid principal mortgage balance of an existing adapted home that you bought without a VA grant
Special Housing Adaptation (SHA)
Vets with certain service-related disability can use SHA grants to adapt or purchase a home to accommodate their disability up to $18,074 in 2020. Grants can be used to:
- Adapt an existing home that the veteran or a family member already owns in which the veteran lives
- Adapt a home the veteran or a family member plans to purchase in which the veteran plans to live
- Help a veteran purchase an already adapted home in which the veteran will live
Apply for benefits
Nonprofit programs helping disabled homeowners
In addition to government programs, a number of nonprofits work on helping disabled individuals secure homes.
Habitat for Humanity
Habitat for Humanity is known for its home-building projects around the world for people in need, including those living with disabilities. To have a home built, homeowners are required to put in a certain number of "sweat equity" hours, which usually means being involved in the actual construction of a home. However, there are other ways to contribute sweat equity that don't involve physical labor, such as researching grant opportunities for the organization or volunteering at a Habitat ReStore, which resells home-building materials from construction projects. Home-building projects can also be used to construct an accessible home.
To be considered, you must:
- Demonstrate a need for safe, affordable housing
- Be able and willing to pay an affordable mortgage
- Partner with Habitat for Humanity through the entire process once selected by providing sweat equity
Apply at your local Habitat for Humanity office or by calling 1-800-HABITAT (422-4828).
Homes for Our Troops
Homes for Our Troops builds or purchases specially adapted homes for veterans who were severely injured in Iraq and Afghanistan so they can live in a safe and barrier-free environment. Veterans served by HFOT sustained injuries such as multiple limb amputations, partial or full paralysis, or severe traumatic brain injury. So far, the organization has built nearly 300 homes and 80 projects are underway.
To qualify, you must:
- Have been injured in the Iraq or Afghanistan wars post-Sept. 11
- Retired or in the process of retiring from the military
- Received a letter of eligibility for the Specially Adapted Housing (SAH) Grant program through the VA
- Use the home as your primary residence
- Have the resources to maintain a home, including ongoing maintenance and upkeep, property taxes, home insurance and utilities
Rebuild Together Americorp
Rebuild Together Americorp builds and repairs homes for needy individuals by partnering with charities and businesses and with the help of volunteers. Applicants who are elderly or disabled are given priority.
Contact a local affiliate to apply.- by Ilana Polyak