How To Qualify For A Mortgage With Social Security Income

7 Min Read
Published Feb. 20, 2024
Written By
Miranda Crace
Happy senior Asian couple using their phone on the couch.

No matter what kind of media you consume, we all seem to be receiving the same message: everyone is buying homes later in life – even into retirement. If you’re a retiree who receives Social Security benefits and is ready to buy a home, a home can be within your reach by combining your Social Security income with other steady streams of income.

A lender may be more willing to approve your loan application as long as that powerful combination of income can comfortably cover your estimated monthly mortgage payments and other fixed monthly bills.

Read on to learn more about qualifying for a home loan using Social Security income.

How Mortgage Lenders View Social Security Income

Lenders consider several sources of income when a borrower applies for a mortgage loan. Borrowers receiving Social Security benefits can use that income to qualify for a mortgage, including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).

Lenders will evaluate your gross Social Security benefit because they use your gross income to qualify you for a loan. Your annual gross income is the amount you make each year before taxes and other expenses are deducted. That’s different from net income, which is your annual income after taxes are deducted.

Can You Get A Home Loan On Social Security?

Monthly Social Security payments count as gross income. To verify your Social Security income, you must submit a benefits letter from the Social Security Administration (SSA) with your mortgage application. If you receive retirement or disability benefits on your behalf, it is assumed that this income will continue indefinitely. However, the letter should explicitly state how much you receive each month and how long you’re scheduled to receive these payments if you are receiving them on behalf of someone else in your household.

If your Social Security payments are high enough to meet your lender’s income requirements, you can use it to qualify for a mortgage – even if it’s the only source of income on your mortgage application.

If your Social Security payments aren’t enough to cover your existing monthly debts and an estimated monthly mortgage payment, consider adding additional sources of income to make your mortgage application more attractive.

Carefully consider your financial situation before applying for a mortgage. Owning a home should be a rewarding experience, not a monthly struggle to cover all your bills. Explore different loan options and consider renting instead of buying if renting better aligns with your financial means and goals.

See What You Qualify For

What Income A Senior Citizen Can Use To Get A Mortgage

Many different income sources can help you satisfy a lender’s income requirement for a mortgage loan. For funds to qualify as eligible income, you must receive them on a reliable and consistent basis.

Social Security Income

Lenders typically consider regular Social Security payments as reliable monthly income. You can request a benefits letter from the Social Security Administration’s website to confirm your payment amount and the type of benefit you receive. To verify your Social Security income, you must submit a benefits letter with your loan application. If you receive those benefits on behalf of someone else, you’ll need to document this with your lender.

401(k) Or IRA Income

Monthly withdrawals from a 401(k), Roth IRA, traditional IRA or another retirement account will be considered income by your lender. Your lender may also request a copy of your most recent retirement account statements to verify the amount and duration of your monthly withdrawals.

Long-Term SSDI Income

Long-term disability payments from the Social Security Administration also qualify as income that can help strengthen your mortgage loan application. Your lender may request a benefits letter from the SSA to verify your income.

Investment Income

Dividends and interest payments from your investments can be used as income to qualify for a mortgage. To prove your investment income, you must provide your lender with at least 2 years of tax returns, including Schedule B information, and a recent statement for the balance of the account. Lenders typically verify that the balance is enough for the income to continue for 3 more years.

A lender will also require copies of your tax returns showing the interest and dividend income you earned over the past 2 years.

Annuity Income

When applying for a mortgage, you can also use the income from annuities (an investment vehicle that pays out regular monthly payments). To confirm to your lender that your annuity payments will continue for at least the next 3 years, request a copy of your annuity statement from the issuing insurance company and submit it with your mortgage application.

Self-Employment Income

If you earn income working for yourself, a lender will require 1 – 2 years of tax returns to see how much you’ve made in self-employment income.

If your self-employment income is irregular, lenders might not use the income to qualify you for a loan.

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How To Strengthen Your Loan Application

The more positives you have on your side, the higher you’ll boost your chances of qualifying for a mortgage.

1. Income

Income is one key factor lenders consider when deciding to approve a mortgage application. The more you earn from qualifying income streams, the higher your chances that a lender will approve your home loan application.

Your Social Security payments can count as income to qualify for a mortgage. If your payments aren’t high enough to cover your monthly fixed debts and a potential monthly mortgage payment, you’ll need to bring in other qualifying sources of income to increase your chances of mortgage approval.

2. Debt-To-Income Ratio

Your debt-to-income ratio (DTI) is another critical number lenders consider when evaluating your mortgage application. Lenders typically prefer that your total monthly debts, including your estimated mortgage payment, don’t exceed 50% of your gross monthly income.

3. Credit Score

To a lender, a low credit score implies a history of late or missed payments, which means you may not qualify for competitive mortgage rates, or your application may be denied. A high credit score will help strengthen your chances of qualifying for a mortgage. Most lenders consider a 740 FICO® Score an excellent score.

4. Down Payment

You can qualify for a conventional mortgage with a down payment that’s 3% of a home’s purchase price. Consider making a larger down payment to increase your chances of qualifying for a mortgage. Lenders typically prefer larger down payments because you’re borrowing less money and demonstrating your financial commitment by investing a significant sum of money in the home before you make your first mortgage payment.

Review these down payment assistance programs that can help make buying a home more affordable.

Home Loans For Seniors On Social Security FAQs

Review these frequently asked questions about securing home loans with Social Security income.

Can you buy a house on Social Security?

Yes, you can buy a house on Social Security. While your Social Security income may meet the lender’s income requirement, they will also review other factors, including your credit score and debt-to-income ratio (DTI), to help determine whether you can afford a monthly mortgage payment and what loan terms to offer.

Which home loans are available for seniors on Social Security?

Older adults have a long list of home loans available to them, including: conventional loans, reverse mortgages, Federal Housing Administration (FHA) loans, Department of Veterans Affairs (VA) loans and U.S. Department of Agriculture (USDA) loans.

What do I need to provide if I’m using Social Security to get a mortgage?

You’ll need to provide proof of your Social Security income, including what benefits you receive, their payment amounts and scheduled payment durations. To get that proof, call the Social Security Administration or visit their website and request a benefits verification letter. If you’re combining your Social Security income with other earned income streams, you must submit proof of income for all sources of income.

The Bottom Line

You can use Social Security income to help qualify for a mortgage loan. And if your SSI payments aren’t enough, combine them with other reliable income streams to meet a lender’s income requirements and pave a financially stable path to homeownership.

If you’re ready to start the home buying process, your next step should be to and connect with a Home Loan Expert to discuss your financing options.

Find A Mortgage Today and Lock In Your Rate!

Get matched with a lender that will work for your financial situation.


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