house keyIn qualifying potential mortgage holders, lending institutions look for income that is stable, reliable, and expected to continue for the foreseeable future. SSDI, SSI, VA disability benefits, and long-term disability income from an employer or insurer are generally considered reliable sources of income, and lenders will accept them as proof of eligibility for a home loan. All the major home loan programs, including FHA, VA, and USDA accept these types of income when you are qualifying for a mortgage. So, yes, you can buy a home on disability income.

You'll need to provide proper documentation of your income and ensure that you meet the lender's credit standards. You'll need to provide some verification—such as a Social Security Administration award letter, a VA award letter, an SSA form 1099, or other documentation—to show proof of your disability income and that your benefits aren't set to expire within the next three years. If the disability income you receive isn't taxed, your lender may "gross it up," meaning they will increase your reported income by a certain percentage (typically 25%) to account for the fact that you get to keep the full amount. Lenders can't ask about the nature of your disability or request a letter from your physician.

Business Insider reports that “lenders can't refuse to consider disability benefits income, and they can't treat you differently because of your disability or your disability income. Lenders can't hold you to stricter documentation requirements than they do other applicants.”  Also, lenders can't ask you about the nature of your disability or request a letter from your physician.


Sean D. Cuddigan
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SSA and VA Disability Attorney in Omaha, Nebraska