4 Popular Options for Financing Senior Housing
Although funding requirements for senior housing vary from state to state, most seniors who meet income requirements can qualify for assistance in funding and locating appropriate accommodations for their elderly years. Many companies specialize in building housing specifically for seniors at affordable rates or with owner financing available. Seniors who require long-term care can opt for various levels of housing and support that may include assisted living, independent living or nursing home care.
Long-Term Care Insurance
For many seniors with private health insurance, long-term care insurance can help cover costs not covered by medical insurance when nursing home care is necessary. In addition, some long-term care insurance plans help cover costs of home care, assisted living, hospice care, Alzheimer's care facilities and adult day care. In many cases, older adults pay for long-term care insurance long before senior housing is necessary to ensure adequate care is available when they can no longer care for themselves or live alone.
Some seniors opt to finance housing with a reverse mortgage, which is a loan for people 62 years of age or older. A reverse mortgage turns equity saved in a home into cash. Seniors who currently own a home yet still want to enter into a senior housing facility can use the cash from a reverse mortgage to pay for housing until their existing home sells or is rented to provide additional income. In most cases, there are some restrictions on how you can use funds from a reverse mortgage.
Seniors with limited income and assets can opt for government-funded housing assistance such as Medicaid. As of 2015, this government assistance program provides financial assistance for long-term care for aging individuals who qualify. Requirements for Medicaid vary by state, but in most cases, seniors must meet income limit requirements and put existing assets toward long-term care and housing.
Commercial lenders often approve loans for seniors to afford housing. Private lending agencies, credit unions and banks evaluate the finances of the seniors and the appraisal of the housing unit or home to determine an interest rate and the terms of the loan. Seniors with limited income resources may also qualify for special financing rates available at private lending institutions, or also may be able to finance through the owners of a particular housing unit, if owner financing is available.
Senior housing is a popular choice for aging adults with limited incomes. Financing these options, though, can prove to be a challenge. Seniors can find assistance and financing options through government programs and commercial lenders.