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My husband and I are embarking on an effort to identify a small home to purchase nearby so his adopted Latvian daughter (my stepdaughter) may begin living independently at 33 years old. She has permanent cognitive disabilities that impact her attention and executive functioning but she has learned how to drive and remains gainfully employed part time.
We set her up with an ABLE account via ABLE United here in Florida so that she can work and save beyond the Social Security Supplemental Security Income (SSI) cap of $2,000 in assets. She paid for her grandpa’s car after he made the decision to stop driving at 92 and a golf cart for working at the ranch near our home. Today she has $11,000 saved and is quite proud of that!
She currently earns about $11,000 annually working (pre-tax on 1099) and coupled with her SSI benefit, is well below the AMI income threshold of $51,840 (family of 1) to be able to afford a mortgage on her own. Thankfully, the ABLE account permits her to cover the mortgage, utilities, property taxes, repairs as qualified disability expenses (QDE).
I am looking for guidance on how best to approach a home purchase and what type of mortgage makes sense. We plan to help her with a downpayment and will be able to cover the gap between what she is earning and the cost to operate the home monthly and annually (using contributions to the ABLE account).
I’d appreciate any advice from this HD community about how to approach this effort to avoid any pitfalls and maximize the effort for Alyssa’s greatest benefit. If all goes well, she will live in the home for the rest of her life supported by her Special Needs Trust after we are gone from this wonderful earth. Thank you all.
Dianne
Have you considered posting your question to the bogleheads.org forum. Vastly wider audience and many have experience in this area.
https://www.bogleheads.org/forum/index.php
Thank you B Carr. I was not aware of that forum.
Hi Dianne. Very nice of you and your husband for helping your daughter and congratulations to her for the savings and this important step. As background I am about to retire after 38 years in the mortgage banking world. The best way for you to finance this home for your daughter is by taking advantage of the of the Family Opportunity option available through both FNMA and FHMLC. What this program allows is for you to purchase another home as a primary residence, for your disabled child (or elderly parent who cannot afford a home on their own) even though you may already own a primary home. This program is a standard part of agency guidelines that unfortunately very few Loan Officers know or understand. Any mortgage or bank that sells direct to the agencies should have access to this unless their company has an overlay restricting usage Hope this help
Thank you Matt for that guidance and congrats on your 38 years of service in the mortgage industry helping individuals and families achieve the American Dream. I will ask about that option in our discussions with lenders. We will be attending a homebuyer education seminar in a month with a local non-profit community housing agency.
Dianne, there’s more that I don’t know about special needs planning, than things that I do know, so I’m afraid I have nothing constructive to add to the conversation. I do want to commend you on all steps you have taken on your step-daughters behalf.
Today’s special needs community is living longer than ever before, so it’s important for parents to plan for a future when they are no longer able to help their special needs children. I am familiar with special needs trusts, but had to look up ABLE accounts. They are a wonderful tool for special needs planning.
Thanks for educating me.
Thanks Dan for your kind words and I am happy to know that you’ve learned a bit about the ABLE accounts. I am an ABLE United parent ambassador. I agree, as our families and friends who are part of the special needs community do indeed live longer, we need to do all we can to help them live fulfilling lives. The financial safety net of homeownership is key to a better quality of life when we (parents) are no longer around.
thanks for your post, Dianne. It’s such a wonderful thing you and your husband are doing. I have nothing to add in terms of answering your question but I’d like to ask a question. Why do you need to buy her a house? Why don’t you rent?
Great question Nick. That was my first thought, too. I thought it would be a good and more affordable first step for her to get comfortable living on her own. However, she has a service dog, Maggie, so having a fenced-in yard for Maggie to play and do her “business” vs. Alyssa walking her on a leash at an apartment complex early in the morning before she heads to work was something we (especially my retired FDNY husband) felt was paramount for her safety. We also thought given market conditions investing in a property now would allow us to create longer term value for her as a homeowner vs renting.