Stay in Your Home

Senior At Home Services

In Home Care

Spouse Care: A spouse can get paid for caregiving, primarily through Medicaid programs, Veteran benefits, or long-term care insurance. Medicaid's "Cash and Counseling" or "Consumer-Directed Services" programs allow recipients to hire spouses, while the VA offers the Program of Comprehensive Assistance for Family Caregivers (PCAFC). Pay generally ranges from $10-$20/hour, depending on the state and care needed. 

Paying for Senior Care +5

Key Pathways to Get Paid as a Spousal Caregiver:

• Medicaid Home & Community-Based Services (HCBS): Many states offer Medicaid waivers allowing the person needing care to select their caregiver, including a spouse. Medicaid generally requires the care recipient to meet income and functional eligibility criteria.

• Veteran Affairs (VA) Programs: Eligible veterans can use the Veterans Directed Care (VDC) program or the PCAFC, which provides a stipend to caregivers.

• Long-Term Care Insurance: Some private policies allow for spouses to be paid, though many require the spouse to become a licensed home care provider.

• Personal Care Agreements: This is a contract between the family member needing care and the spouse, outlining paid duties to ensure the payment is not viewed as a gift by Medicaid. 

• Paying for Senior Care +4

Steps to Take:

1. Check Medicaid Eligibility: Contact your state Medicaid office or use the Givers matching tool to find programs.

2. Contact the VA: If the spouse is a veteran, contact the VA regarding care programs.

3. Review Insurance Policies: Check if long-term care insurance covers family caregiving.

4. Register as a Provider: You may need to register with the state Medicaid agency as a personal care attendant.

Social Services

• Services are prioritized for the elderly, individuals with disabilities, low-income individuals, and families with children under the age of six. 

Reverse Mortgage - Stay in your home using your home equity

• Staying in your home for as long as possible is an option when in-home assistance is affordable.

• Tapping into your home's equity is a way to stay in your home longer and cover needed expenses.

• Benefits

  • Tapping built-up equity: Allows borrowers to use equity that has built up in their home over time 

  • Lifetime income: Stay in your home longer

  • Non-recourse financing: Neither the homeowner nor their heirs will owe more than the property is worth if the loan amount is more than the value of the property.

  • Tax Free payouts: The money received from a reverse mortgage is non-taxable income.

  • Asset preservation: It may be better to tap into your equity than spend down other assets.

•  Finance Options

  • Tenure: Equal monthly payments as long as living in the home

  • Term: Equal monthly payments for a fixed number of months

  • Line of Credit: Payments as needed until the line of credit is exhausted

    • The loan only accrues interest on the loan amount withdrawn and the remaining line of credit grows at the same rate so that the amount of available credit increases.

    • The HECM line of credit does not require repayment until the borrower sells, vacates the home or passes away.

    • The amount cannot be frozen

    • A negative-equity situation cannot occur.  The borrower, or heirs, will never owe more than the property is worth at the time of sale.

  • Modified Tenure: Combination of scheduled payments and a line of credit

  • Modified Term: Combination of monthly payments (fixed number of months) and a line of credit

  • Lump Sum (Note: This could affect Medicaid)

• Eligibility Criteria

  • The youngest borrower must be 62 or older.  I have some programs that start at age 55.

  • You must own the property outright and have a considerable amount of equity

  • Occupy the property as your principal residence

  • Not be delinquent on any federal debt

  • Have financial resources - residual income - to continue paying taxes, insurance, HOA fees, if applicable and maintenance of the property.  In some cases, taxes and insurance can be included in the mortgage.

  • Not be delinquent on any federal debt

  • Participate in a counseling session with a HUD Certified HECM Counselor

  • Eligiable Properties: Single family homes, FHA-Approved Condos/HOA/Coops, Manufactured homes built after 1976 and installed on a permanent foundation.

  • Two-to-Four unit homes with one owner occupied unit.

• Four factors determine the amount available

  • Appraised value of the home

  • Age of the youngest borrower or non borrowing spouse

  • Interest rates

  • Maximum claim amount

• Upfront Costs

  • Counseling: $125 HUD recommended fee, some services offer free counseling

  • Origination Fee 

    • $2,500 minimum, $6,000 maximum

    • Greater of $2,500 or 2% of MCA up $200,000

    • Plus 1% of MCA over $200,000

  • Mortgage Insurance (Not required for proprietary reverse mortgages)

    • 2% initial premium

    • .05% annual premium

  • Closing costs

    • These costs are usually the same as a traditional mortgage including appraisal, title insurance, title search, inspections, recording & closing fees, state and municipal fees,  Fees can be financed as part of the loan.

  • Monthly fees

    • Service Fee $30-$35 (waived by some lenders)

    • Taxes: Real estate taxed and insurance may be set aside by lender

  • When the Loan Ends

    • Move/Absence: The borrowers move to another residence, or the last borrower no longer lives in the home as a primary residence for a period of 12 consecutive months.  Short-term stays in a hospital or second home do not disqualify the property.

    • Sale: The property is sold

    • Death: The last borrower or non-borrower spouse residing in the home passes away

    • Neglect: The borrower stops paying taxes and insurance and/or stops maintaining the property.

  • Non-Borrowing Spouses

    • If the Borrower passes away and the HECM was issued on or after August 2, 2014, the eligible non-borrowing spouse (NBS) may remain in the home.  The loan repayment is deferred if the following conditions are met

      • At the time of loan closing, the NBS is married to the borrower and remains married for the rest of the borrower's lifetime or until the loan is satisfied

      • The spousal status of the borrower and NBS is disclosed at the time of the loan application and closing.

      • The NBS is specifally named as such in the mortgage documents.

      • The property is the NBS's principal residence.

      • The NBS continues to meet all loan obligations.

  • Heirs

    • When the last surviving homeowner passes away, the remaining equity in the property goes to the heirs, not the bank.  Heirs have a chance to sell the house (must be arms length) to pay off the debt, pay off from another source, or obtain a new forward mortgage.  If the property is sold by heirs, the sale price must be at least 95% of the appraised value.

    • If the amount owed is more than the market value, the heirs or the owner may let the house go to the lender through transfer or foreclosure.  A reverse mortgage is a non recourse loan so neither the heirs or the estate are responsible for the short fall.  This is covered with the mortgage insurance.

    • If ther are no heirs, the bank may take possession of the home and sell it.  The estate may retain ownership of the property, but would be required to pay off the loan balance.

    • Spending down the equity in the home reduces the value of the estate for tax purposes.

  • More FAQs

    • If a borrower needs more money to close, the funds must be available at least 60 days in advance.  The borrower must present proof of the availability and source of funds, such as a letter of deposit, proof of liquidation of other assets, a deed of sale, a closing disclosure, or a letter from a relative stating that any funds given do not need to be repaid.

    • When a reverse mortgage is placed on a property, two liens are created on the property.  One is from the lending institution, and the other lien is from HUD when it's a government-insured loan.  

Tax Matters

• Proofs of residency 

  • An affidavit declaring residency

  • Voter registration

  • Documented length of time spent in the residence

  • A bank account

  • Church or temple membership

  • Driver's license

  • Utility bills

  • Mailing address on a tax return

  • Reference to the domicile/principal residence in a will

• Property Taxes

  • In Florida, a senior homeowner can take advantage of additional tax exemptions to reduce their property tax

  • Deferring or freezing taxes is available to avoid taxing seniors out of their homes.  The state may recover deferred taxes through a property lien due on the sale or death of the homeowner or surviving spouse.

• Mortgage Interest Deduction

  • The Tax Duts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on a home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer's home that secures the loan.   These types of loans have limited loan amounts and are only used for the primary residence or second homes.

• Capital Gains for Heirs

  • Basis-Step-Up for Heirs

    • The estate is subject to tax, generally based on the fair market value of the assets at the time of death, not the deceased's basis.  Heirs receive the estate assets with a stepped-up basis of fair market value. at the date of the decedent's death.  This means that if an heir sells an asset received from the estatebefore the asset further appreciates in value, there is no capital gain tax due on the sale.  The stepped-up basis rule applies to real property included in the decedent's gross estate.  In community property states, surviving spouses benefit from a stepped-up basis for both the inherited and their own shares of community property. 

    • The step-up basis rule does not apply to property acquired by the decedent by gift within one year of the date of death when the heir is the original donor or donor's spouse.  The decedent's basis in the property carries over to the heir.

  • Capital Gains on a Principal Residence

    • A capital gain of up to $250,000 single or $500,000 married filing jointly is exempt from tax if the property has been owned and used by the taxpayer as a principal residence for at least two years out of the five years before the sale.

    • The exemption does not require a minimum age or require rolling over to a higher-valued property.  It can be claimed repeatedly as long as residency requirements are met.

    • A widowed homeowner can claim the full $500,000 exemption if the sale occurs within two years of the death of the spouse and the surviving spouse has not remarried.

    • Military and Foreign Service personnel on qualified active duty assignments are allowed to suspend the five-year test period for up to 10 years.

    • If the homeowner must sell due to illness or disability (their own or that of a family member for whom they are responsible), job relocation, or specified unforeseen circumstances, a prorated portion of the gain is exempt.

  • Gift and Generation Skipping Tax

    • Gifting assets to intended heirs during life, instead of as a bequest, moves assets out of the gross estate.  It also provides the givers the pleasure of making the gift during their lifetime and assures that assets go to particular individuals.  An individual can make an annual gift to another individual, free of gift taxes and reporting, of up to $16,000 per recipient. Each spouse can make gifts of up to that amount, totaling $32,000 per year, to any other person.  When a gift exceeds $16,000, its value is based on the fair market value as of the date of the gift, not on the donor's basis.  This includes an interest in real estate. 

    • Gift tax is paid by the donor if the gift exceeds $15,000, but, in reality, very few donors ever pay a gift tax.  This is because taxable gifts are made during the donor's life. However, a gift tax return must be filed; no tax is payable out of pocket until the cumulative amount of lifetime taxable gifts exceeds the exclusion limit.  Payment of medical expenses or college tuition is not subject to gift tax if payments are made directly to the institutions; these are know as "direct transfers."  The top gift tax is 40%. 

    • Gifts and bequests from grandparents to grandchildren can trigger generation-skipping transfer (GST) tax.  Gifts and bequests made to heirs who are not direct descendants, such as the children of a life partner, can also trigger GST of 40% if the recipient is 37.5 years younger than the donor.

Legal Matters

• Be sure your Estate is in order.  Click here for Legal Services

Social Security, SSI, Medicare and Medicaid

• Payout from a reverse mortgage doesn't impact Social Security or Medicare benefits.  But a recipient of a need-based program, like Medicaid and Supplemental Social Security (SSI), must be careful that the payout does not exceed liquid-asset limits.  Reverse mortgage payouts can impact Medicaid eligibility even though home equity is not a countable asset.  An estate recovery or TEFRA lien placed on a reverse-mortgage property will prevent an heir from selling the home without first reimbursing Medicaid.  Local public benefits of the office or an attorney should be contacted for more information and clarification before taking any action.

• Log in to the Social Security Administration:  www.SSA.gov