Living in a home of one’s own is a dream for many but it can be
very difficult to realize, especially for individuals with a disability.
With proper planning, owning or renting a home of one’s own is
a viable option for even those persons with severe developmental
delays and/or health and physical challenges. Families can maximize
public and private resources and community support to ensure that
a family member with a disability will have the opportunity to live
independently if he or she so chooses.
If a parent dies and leaves an adult disabled child an outright
inheritance, the child may lose eligibility for any or all of several
federal benefit programs for which he or she is otherwise qualified.
It is therefore critical that all families write a will that includes a
supplemental needs trust (SNT) for the family member who is
challenged by a physical or cognitive disability. A carefully written SNT
will help manage the funds set aside for a beneficiary’s future without
influencing his/her eligibility for government assistance programs,
many of which are necessary to make home ownership feasible. A
trust can provide funds for housekeeping, home maintenance and
repairs, lawn and snow removal services, automobile or other private
transportation expenses, and advocacy services without affecting
benefits. By combining the private funds managed by a SNT with the
financial assistance of government programs, a trust beneficiary can
enjoy a higher standard of living than he/she could otherwise afford.
Most parents are not able to save enough money before their death to
pay for all of the future needs of their child. A SNT enables a family
to set aside funds for their child to be used in addition to government
assistance like SSI, Medicaid, food stamps, personal care attendants,
and housing subsidy programs such as Section 8. When a person with
a disability has the protection of a privately funded SNT, he/she retains
eligibility for any and all public benefits for which he/she is eligible due
to his/her disabilities.
One way to reduce the cost of independent living is through the
purchase of a home with reduced financing costs. Families and
individuals can get very affordable deals on homes which have been
repossessed. When a person fails to pay his or her mortgage payments
the bank is allowed to foreclose on these loans and claim ownership of
the home. Because banks are often anxious to sell these homes quickly
in order to minimize their loss on the unpaid mortgage, foreclosed
properties often sell for below market value. Information regarding
foreclosed properties can be obtained from the following sources:
1) The Federal Deposit Insurance Corporation – The FDIC will
provide a list of foreclosed properties that are for sale. This list contains
the name, address, description and price of the properties, as well as
contact persons and phone numbers.
2) Home Mortgage Fund Providers – The Fannie Mae and Freddie
Mac corporations purchase home mortgages and work with lenders
to provide mortgage loans to individuals and families with limited
incomes. Online databases often list Fannie Mae and Freddie Mac
properties for sale alongside those offered by the FDIC.
3) Housing and Urban Development (HUD) – HUD takes over
properties insured through the Federal Housing Administration
(FHA). Because HUD tries to dispose of these properties quickly, one
can often purchase homes for below-market price.
Reducing the down payment or financing costs of a home can also
increase its affordability for first time or low income buyers. The
following programs provide this type of assistance:
1) The Section 502 and Section 515 Programs – The U.S. Department
of Agriculture administers several housing assistance programs, known
collectively as the Rural Housing Programs. The Section 502 Program
finances the purchase, construction, or repair of single-family homes
for individuals who are low or very low income. The Section 515
Program offers very low to moderate income families low interest loans
to finance multifamily or congregate housing.
2) Shelter Plus Care – This program, available through the McKinney/
Vento Homeless Assistance Act of 1987, offers rental assistance to
homeless persons with disabilities in conjunction with outsidefunded supportive sources. The funds are available for any of four
assistance types, the most appropriate for individuals with disabilities
being tenant-based rental assistance (TRA). TRA participants reside
in housing of their choice (barring any requirements based on
supportive service availability), which is funded for a contract term of
five years. Arguably, all persons with a disability or handicap may be
considered at risk for homelessness, as their parents are not required to
supplement their support as adults. Those individuals whose families
are no longer able to support them are thus eligible for this program.
3) The Community Reinvestment Act (CRA) – Passed by Congress in
1977, the CRA requires banks to invest in the community they serve.
Honest assessment of the financing needs of the community, especially
its low and moderate income neighborhoods, leads many banks to
earmark large sums of mortgage money for community investment.
Under this Act, a bank may allow an individual to take over a mortgage
on a foreclosed property. By taking over an existing mortgage through
the CRA, a low or moderate income person must only repay the
amount outstanding on the mortgage, and thus may take advantage
of below-market rates and/or no down payment. As a result of
changes to the Act made in 1989, banks are now required to make
public disclosure of its CRA rating. While the Act does not demand
that banks give more favorable terms, many do, as they will not meet
community investment standards unless enough individuals and
families can qualify for home purchases. Lenders will seldom inform
the buyer of these terms, so buyers need to be aggressive in pursuing a
mortgage through the CRA with the best possible terms.
There are several housing assistance programs that allow funds to be
used in many different capacities, often allowing local or state offices
and/or governments to dictate how the funds will be distributed or
used in a specific community. Two such programs are:
1) Community Development Block Grants – Funded by HUD,
these grants are administered through local community development
offices. The funds may be used to purchase or to rehabilitate
residential properties and are available only to low and moderate
income individuals or families. States have a great deal of flexibility
as to how these funds are used. Strong advocacy on the part of
agencies and consumers can greatly impact the availability of these
funds to persons who are disabled.
2) The HOME Program -The HOME Program, created by the
National Affordable Housing Act of 1990, is the largest Federal block
grant to state and local governments. The program is extremely
flexible, allowing each government to design its own housing
strategies to meet local needs. Every five years a Comprehensive
Housing Affordability Strategy (CHAS) determines how the
HOME funds are to be utilized to best aid low income persons in
the acquisition of affordable housing. The five year plan is updated
every year so that it reflects the changing needs of each individual
community. Because this blueprint is developed on a local level,
advocates can aid in the development of the plan to ensure that
the program is specifically responsive to the needs of persons with
disabilities. HOME funds can be provided to persons on waiting
lists for the Section 8 program, be used to rehabilitate rental or
homeowner properties, and may even be used to construct new
property. The HOME program bridges the gap between the financial
means of potential homeowners and the market cost of housing in
their community.
The most commonly used form of housing assistance for low income
individuals is the HUD Housing Choice Voucher Program (HCVP).
Originally created in 1975 as the Section 8 Program, the HCVP in an
attempt to increase the housing options of low income individuals
and reduce the concentration of low income households in particular
neighborhoods.
The HCVP tenant-based assistance allows individuals and families
to select private rental housing from a list of approved properties in
their community. Tenants generally pay between 30 and 40% of their
income in rent and the remaining rent is covered by a rental voucher
paid directly to the landlord by a local Public Housing Authority
(PHA). One of the major drawbacks of this program is that it can be
difficult to find landlords who are willing to participate, as they must
agree to accept the “fair market rate” determined by HUD. This
so called “fair market rate” is often below the real market rate, thus
forcing landlords to accept a lower rent than they might otherwise
receive. Despite this obstacle, the HCVP tenant-based assistance
has proven extremely successful and quite popular. The other, less
commonly used types of housing assistance provided by the HCVP
are in the form of project-based rental assistance, home ownership
assistance, and down payment assistance.
By creating a SNT and taking advantage of government assistance
programs like those detailed above, families can ensure that a
member with a disability attains his or her goal of independent
living.
Further information about the housing assistance available to
individuals with a disability can be found online at the following
websites:
FDIC – Home Page: www.fdic.gov/
FDIC Real Estate Sales:
www.fdic.gov/buying/owned/index.html
Fannie Mae Corporation – Home Page:
www.fanniemae.com/
Freddie Mac Corporation – Home Page:
www.freddiemac.com/
HUD – Home Page: www.hud.gov/
HUD Reduced Price Homes:
www.hud.gov/offices/hsg/sfh/reo/homes.cfm
HUD Housing Choice Vouchers:
www.hud.gov/offices/pih/programs/hcv/index.cfm
HUD Shelter + Care Program:
www.hud.gov/offices/cpd/homeless/library/spc/index.cfm
USDA Rural Housing Service – Home Page:
www.rurdev.usda.gov/rhs
Individual & Family Housing Opportunities:
www.rurdev.usda.gov/rhs/sfh/indiv_sfh.htm
Community Reinvestment Act – Home Page:
www.ffiec.gov/cra/default.htm