Profile picture for coues6x6

My mom was just put into an adult care facility, i'm planning to purchase her home.

Her home has a $17,000 note on it and she needs it out of her name to show no assets, this will help her qualify for Medicare assistance. The home is in Globe,AZ and after getting with the siblings it was determined i take the house since my wife and i have the only interest in the home. I don't have cash to purchase the home outright so i'm wondering if a bank would give a loan on the property. I'm sure the house would not be sellable since the foundation is severely cracked and has termites, the home was built in the 50's i believe. Can you please offer advice?
  • July 28 - Globe
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Answers (4)

Profile picture for wetdawgs
I agree with the advice to talk with an attorney in elder law. 

Some rules about finances have changed related to eligibility for Medicare assistance.  Assets have to be transferred > 5 years before the requirement for assistance.    In other words, a transfer out of her name will help her in 5+ years, not today.    The house may be a delayed assets, with a lien placed on it if it was transferred within 5 years of requiring assistance.

In addition, if you purchase the home today for less than market value, your mother is likely to owe gift taxes on the gift of equity.  Review that with the attorney also.

Please let us know what the attorney says.




  • July 29
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The cash on hand to purchase isn't your largest hurdle, the foundation cracks and termites are. 

Most lenders allow gift equity, meaning you could write a purchase contract with the down payment being equity in the property that is gifted to you by your mother. However, in order to accomplish this, the home has to be in reasonable shape to occupy or you won't find any lender willing to use it as collateral. 

Just thinking off the top of my head, if you plan to live in the home, an FHA 203k rehab loan might be an option to both pay off your mother's note and fix the place up in one transaction. This is assuming you are otherwise qualified to purchase with an FHA loan.   
  • July 29
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With foundation issues most banks would require that to be repaired before lending on it unless you used a full FHA 203k purchase. Your loan officer would be able to calculate the amount allowable for the repairs. At least a portion of the foundation would need to be reused. The 203k would allow enough renovation dollars to repair the home and is calculated based upon the as completed value. Most lenders or banks will not fund mortgages under $50,000. It sounds like you would have substantial repairs on this home so I do not believe that would be a problem.
  • July 29
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Profile picture for SoCal Engr
Have you talked to an attorney who specializes in elder law? I am not an attorney, but I just went through this process.

My understanding is that her personal residence is not counted as an asset when qualifying for Medicare (see a USG site here). However, you need to make sure that title is transferred out of her name before her death, or Medicare could attach a lien to recover costs of her care.

This may not help a whole lot, but at least it should buy you some time to work out the $17K and figure out how to best proceed.

Best advice is to talk to a family law attorney specializing in elder law and trusts. There is much to know if you want to (a) make sure your mom is cared for, and (b) protect the estate as-best-as-possible.
  • July 28
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