Give me your advice

So, not to rain on your parade... but if your thought process around the government supporting your grandmother is centered on Medicaid, you are going to be out of luck. Medicaid does a 5 year look-back as to assets in her name to specifically exclude patients who gift their assets to qualify for Medicaid. So if that is the case, it won't even matter if you sell the asset, as it would be seen as an asset of hers for the next 5 years (or the proceeds would be seen as hers if it was sold).

Here is a link that has more details:

Otherwise, the easiest thing to do is to have a cosigner on the loan to get you over the age & income hump. You can manage it, etc, and just let it ride in whomever's names until you could eventually refinance the property into yours when you have more income. You would just need to coordinate on depreciation and such if you were filing taxes separately. I imagine there is a way for you to split the deductions & such if needed - or one person could take them all, but a CPA could speak to that better. It is highly likely you will want to refinance it anyway down the road because you will be buying it at a fairly high interest rate in today's rate environment if the first issue of Medicaid doesn't scrap the deal to begin with.

She could still sell the house and then use the funds to pay for her care... so the house can still stay in the family's name though.

Wish you all the best!

Randy

Konstantin GinzburgPro Member

Member since 2021 · 376 posts · 242 votes

3y

I'm a little confused as to why she needs to sell the property to meet the state's requirements. Since the property is fully paid off and is owned by her, she should have the ability to do whatever she wants with the property whether its a seller finance or simply signing an Articles of Transference to legally transfer the title to another member of the family. If she needs a certain amount of capital to pay for her treatment from the state, then that is another matter. If you haven't found any financers who are willing to finance the deal as is, then you should just continue to call around to different lenders until you find one that is willing to work with you. Try to go to local lenders as opposed to national chains, from my experience local lenders are more willing to come up with other financing measures rather than 30 year fixed rated standard loans. Try to ask for FHA or DSCR loans to see if they are willing to offer those.

Randall AlanPro Member

Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes

3y

Quote from @Konstantin Ginzburg:

I'm a little confused as to why she needs to sell the property to meet the state's requirements. Since the property is fully paid off and is owned by her, she should have the ability to do whatever she wants with the property whether its a seller finance or simply signing an Articles of Transference to legally transfer the title to another member of the family. If she needs a certain amount of capital to pay for her treatment from the state, then that is another matter. If you haven't found any financers who are willing to finance the deal as is, then you should just continue to call around to different lenders until you find one that is willing to work with you. Try to go to local lenders as opposed to national chains, from my experience local lenders are more willing to come up with other financing measures rather than 30 year fixed rated standard loans. Try to ask for FHA or DSCR loans to see if they are willing to offer those.

@Konstantin Ginzburg

The OP has not clarified, but from the nature of the post, I am making a presumption that they want to get the grandmother qualified for (Federal) Medicaid. Medicaid is sort of the medical insurance of last resort for the poor. You are only allowed to have assets totaling $2,000 to $3,000... PERIOD. So if you own a home, or anything else of value (there are a few exceptions) you do not qualify for Medicaid. The idea is that you could sell your assets and pay for your healthcare coverage yourself.

It appears the OP wants to get the house out of his grandmother's name so that she would qualify for Medicaid. I was saying that the Medicaid program does a 5 year lookback for any assets, so the idea of selling the house will not accomplish the objective of getting her on Medicaid (if that is actually what he is attempting to do

Randy

Max Bellino

OP

Investor · MA · Member since 2022 · 25 posts · 15 votes

3y

Quote from @Randall Alan:

Quote from @Konstantin Ginzburg:

I'm a little confused as to why she needs to sell the property to meet the state's requirements. Since the property is fully paid off and is owned by her, she should have the ability to do whatever she wants with the property whether its a seller finance or simply signing an Articles of Transference to legally transfer the title to another member of the family. If she needs a certain amount of capital to pay for her treatment from the state, then that is another matter. If you haven't found any financers who are willing to finance the deal as is, then you should just continue to call around to different lenders until you find one that is willing to work with you. Try to go to local lenders as opposed to national chains, from my experience local lenders are more willing to come up with other financing measures rather than 30 year fixed rated standard loans. Try to ask for FHA or DSCR loans to see if they are willing to offer those.

@Konstantin Ginzburg

The OP has not clarified, but from the nature of the post, I am making a presumption that they want to get the grandmother qualified for (Federal) Medicaid. Medicaid is sort of the medical insurance of last resort for the poor. You are only allowed to have assets totaling $2,000 to $3,000... PERIOD. So if you own a home, or anything else of value (there are a few exceptions) you do not qualify for Medicaid. The idea is that you could sell your assets and pay for your healthcare coverage yourself.

It appears the OP wants to get the house out of his grandmother's name so that she would qualify for Medicaid. I was saying that the Medicaid program does a 5 year lookback for any assets, so the idea of selling the house will not accomplish the objective of getting her on Medicaid (if that is actually what he is attempting to do

Randy

Yes exactly. Thanks Randy.

Max Bellino

OP

Investor · MA · Member since 2022 · 25 posts · 15 votes

3y

Quote from @Randall Alan:

So, not to rain on your parade... but if your thought process around the government supporting your grandmother is centered on Medicaid, you are going to be out of luck. Medicaid does a 5 year look-back as to assets in her name to specifically exclude patients who gift their assets to qualify for Medicaid. So if that is the case, it won't even matter if you sell the asset, as it would be seen as an asset of hers for the next 5 years (or the proceeds would be seen as hers if it was sold).

Here is a link that has more details:

Otherwise, the easiest thing to do is to have a cosigner on the loan to get you over the age & income hump. You can manage it, etc, and just let it ride in whomever's names until you could eventually refinance the property into yours when you have more income. You would just need to coordinate on depreciation and such if you were filing taxes separately. I imagine there is a way for you to split the deductions & such if needed - or one person could take them all, but a CPA could speak to that better. It is highly likely you will want to refinance it anyway down the road because you will be buying it at a fairly high interest rate in today's rate environment if the first issue of Medicaid doesn't scrap the deal to begin with.

She could still sell the house and then use the funds to pay for her care... so the house can still stay in the family's name though.

Wish you all the best!

Randy

No, from what I understand because my grandmother is selling it at the tax assessed value. She will get the 460k that the sate will dwindle down
eventually. So when they do the look back they see she sold it at a price where they can't come after us/her. I can't answer confidently as most of the info is from my attorney. It's been tricky to get through the weeds you could say.

Konstantin GinzburgPro Member

Member since 2021 · 376 posts · 242 votes

3y

Quote from @Max Bellino:

Quote from @Randall Alan:

Quote from @Konstantin Ginzburg:

I'm a little confused as to why she needs to sell the property to meet the state's requirements. Since the property is fully paid off and is owned by her, she should have the ability to do whatever she wants with the property whether its a seller finance or simply signing an Articles of Transference to legally transfer the title to another member of the family. If she needs a certain amount of capital to pay for her treatment from the state, then that is another matter. If you haven't found any financers who are willing to finance the deal as is, then you should just continue to call around to different lenders until you find one that is willing to work with you. Try to go to local lenders as opposed to national chains, from my experience local lenders are more willing to come up with other financing measures rather than 30 year fixed rated standard loans. Try to ask for FHA or DSCR loans to see if they are willing to offer those.

@Konstantin Ginzburg

The OP has not clarified, but from the nature of the post, I am making a presumption that they want to get the grandmother qualified for (Federal) Medicaid. Medicaid is sort of the medical insurance of last resort for the poor. You are only allowed to have assets totaling $2,000 to $3,000... PERIOD. So if you own a home, or anything else of value (there are a few exceptions) you do not qualify for Medicaid. The idea is that you could sell your assets and pay for your healthcare coverage yourself.

It appears the OP wants to get the house out of his grandmother's name so that she would qualify for Medicaid. I was saying that the Medicaid program does a 5 year lookback for any assets, so the idea of selling the house will not accomplish the objective of getting her on Medicaid (if that is actually what he is attempting to do

Randy

Yes exactly. Thanks Randy.

Thanks for the clarification. I'm not very familiar with the process of medicade qualification so I doubt I can offer up much help. However, in addition to the problem of the 5 year lookback that @Randall Alan pointed out; wouldn't selling the house still not help since she is just converting a real estate asset into a liquid cash asset so would not qualify for medicade if they tie coverage to asset holdings?

Randall AlanPro Member

Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes

3y

Quote from @Max Bellino:

Quote from @Randall Alan:

So, not to rain on your parade... but if your thought process around the government supporting your grandmother is centered on Medicaid, you are going to be out of luck. Medicaid does a 5 year look-back as to assets in her name to specifically exclude patients who gift their assets to qualify for Medicaid. So if that is the case, it won't even matter if you sell the asset, as it would be seen as an asset of hers for the next 5 years (or the proceeds would be seen as hers if it was sold).

Here is a link that has more details:

Otherwise, the easiest thing to do is to have a cosigner on the loan to get you over the age & income hump. You can manage it, etc, and just let it ride in whomever's names until you could eventually refinance the property into yours when you have more income. You would just need to coordinate on depreciation and such if you were filing taxes separately. I imagine there is a way for you to split the deductions & such if needed - or one person could take them all, but a CPA could speak to that better. It is highly likely you will want to refinance it anyway down the road because you will be buying it at a fairly high interest rate in today's rate environment if the first issue of Medicaid doesn't scrap the deal to begin with.

She could still sell the house and then use the funds to pay for her care... so the house can still stay in the family's name though.

Wish you all the best!

Randy

No, from what I understand because my grandmother is selling it at the tax assessed value. She will get the 460k that the sate will dwindle down
eventually. So when they do the look back they see she sold it at a price where they can't come after us/her. I can't answer confidently as most of the info is from my attorney. It's been tricky to get through the weeds you could say.

I did a little more research (being the curious one....) and I was off on exactly what is allowed on medicaid. You are allowed to have a house... as long as you are living in it or plan to return to it. But otherwise the asset limit is still $2,000 to $5,000. Obviously if you are working with a lawyer they know more than we do on all this.

I think what you are talking about is what is called the Estate Recovery Program... where after someone passes away, Medicaid would seek to recover what they paid for the patient out of the proceeds of their remaining assets... which is often the house. I pasted in the blurb below... but this is the link to Florida's program... to which I imagine it is similar across the country given it is a Federal program:

------------

Exemption Rules
For home exemption, the Medicaid applicant must live in their home or have Intent to Return, and in 2023, have a home equity interest no greater than $688,000. Equity interest is the amount of the home’s value owned by the applicant after subtracting any home debt. If a non-applicant spouse lives in the home, it is exempt regardless of any other circumstances. For seniors applying for Regular Medicaid, there is no home equity interest limit.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Florida’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

----------

This is a fairly succinct look at income limits. It was higher than what I thought.

Wish you all the best with this. Government agencies are so fun to deal with, I'm sure!

Randy

Max Bellino

OP

Investor · MA · Member since 2022 · 25 posts · 15 votes

3y

Quote from @Randall Alan:

Quote from @Max Bellino:

Quote from @Randall Alan:

So, not to rain on your parade... but if your thought process around the government supporting your grandmother is centered on Medicaid, you are going to be out of luck. Medicaid does a 5 year look-back as to assets in her name to specifically exclude patients who gift their assets to qualify for Medicaid. So if that is the case, it won't even matter if you sell the asset, as it would be seen as an asset of hers for the next 5 years (or the proceeds would be seen as hers if it was sold).

Here is a link that has more details:

Otherwise, the easiest thing to do is to have a cosigner on the loan to get you over the age & income hump. You can manage it, etc, and just let it ride in whomever's names until you could eventually refinance the property into yours when you have more income. You would just need to coordinate on depreciation and such if you were filing taxes separately. I imagine there is a way for you to split the deductions & such if needed - or one person could take them all, but a CPA could speak to that better. It is highly likely you will want to refinance it anyway down the road because you will be buying it at a fairly high interest rate in today's rate environment if the first issue of Medicaid doesn't scrap the deal to begin with.

She could still sell the house and then use the funds to pay for her care... so the house can still stay in the family's name though.

Wish you all the best!

Randy

No, from what I understand because my grandmother is selling it at the tax assessed value. She will get the 460k that the sate will dwindle down
eventually. So when they do the look back they see she sold it at a price where they can't come after us/her. I can't answer confidently as most of the info is from my attorney. It's been tricky to get through the weeds you could say.

I did a little more research (being the curious one....) and I was off on exactly what is allowed on medicaid. You are allowed to have a house... as long as you are living in it or plan to return to it. But otherwise the asset limit is still $2,000 to $5,000. Obviously if you are working with a lawyer they know more than we do on all this.

I think what you are talking about is what is called the Estate Recovery Program... where after someone passes away, Medicaid would seek to recover what they paid for the patient out of the proceeds of their remaining assets... which is often the house. I pasted in the blurb below... but this is the link to Florida's program... to which I imagine it is similar across the country given it is a Federal program:

------------

Exemption Rules
For home exemption, the Medicaid applicant must live in their home or have Intent to Return, and in 2023, have a home equity interest no greater than $688,000. Equity interest is the amount of the home’s value owned by the applicant after subtracting any home debt. If a non-applicant spouse lives in the home, it is exempt regardless of any other circumstances. For seniors applying for Regular Medicaid, there is no home equity interest limit.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Florida’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

----------

This is a fairly succinct look at income limits. It was higher than what I thought.

Wish you all the best with this. Government agencies are so fun to deal with, I'm sure!

Randy

Thank you for all this!