How Can Seniors Find Affordable Housing?

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The cost of renting a home continues to rise, although the increases have been slowing in recent months. Several factors contribute to higher rents, including inflation, a shortage of affordable housing, and the expiration of rent freezes imposed during the pandemic.

The lack of affordable housing can be a burden for people who live on a fixed income. Many retirees who live on Social Security are finding it difficult to find housing that suits their budget. Even seniors who own a home might find it difficult to pay property taxes, homeowners’ insurance, and home maintenance costs. Older homeowners who are still paying a mortgage often find it difficult to make payments after they stop working — especially if payments are tied to adjustable mortgage rates that continue to rise.

Most older adults who own a home would like to remain in that home for as long as they can. Yet only 15% of seniors have made significant plans to age in place. Their homes may require modifications, such as relocating a bedroom from an upper floor to the ground floor to accommodate osteoarthritis in hips and knees. They may need to hire cleaners or caregivers to assist them with tasks they can no longer perform easily. Seniors should give some thought to how they will pay those expenses as they leave the workforce.

Home Equity

Homeowners who have paid their mortgages and those with substantial equity in their homes may be able to take out a home equity loan or a reverse mortgage. Homeowners might want to speak to a trusted financial adviser before pursing either option. Home equity loans might help homeowners pay property taxes and other living expenses, but they increase debt and often have interest rates that rise with inflation.

Reverse mortgages are a loan against equity. They can be used to pay off an existing mortgage, freeing the homeowner from mortgage payments. The loan is not repaid until the house is sold or the homeowner dies. Interest rates, closing costs, and mortgage insurance costs are often similar to the cost of a conventional mortgage. While reverse mortgages may allow homeowners to age in place, borrowers should shop around for the best deal. 

Subsidized Caregiver Assistance

Most caregivers for older adults are family members who volunteer their time. When homeowners and renters need to hire outside help, they might also need help paying for services.

Most states offer assistance to low-income seniors through Medicaid. Home and Community-Based Services (HCBS) Waivers allow state Medicaid programs to pay for in-home services that help older adults live independently. Those services vary from state to state. Covered services may include homemaking, home health aides, personal care attendants, rehabilitation services, and adult day care.

Subsidized Senior Housing

The Department of Housing and Urban Development subsidizes housing for low-income seniors who have few assets. While HUD makes “section 8” housing available without regard to age, its “section 202” housing program targets older adults. The program subsidizes rent (usually capping rent at 30% of income) for very low-income individuals who have reached the age of 62.

Most subsidized units have grab rails. Some are fully accessible to residents in wheelchairs. The program may pay for certain support services, including cleaning and cooking. Some facilities have service coordinators who help residents obtain other support services.

Unfortunately, demand for subsidized units far exceeds the few units that become available each year. The waiting period for section 202 housing ranges from months to years, depending on location.

Assisted-Living Facilities

Assisted-living facilities are operated by both for-profit and nonprofit companies. In either case, they provide housing for seniors who need daily assistance with the activities of daily living, such as getting dressed, bathing, and preparing and eating meals.

With an average monthly cost of $4,500, assisted-living facilities may be beyond the financial means of low-income seniors. However, low-income seniors who qualify for Medicaid might be entitled to coverage for the cost of services. Medicaid does not cover the cost of room and board. Coverage depends upon the state in which the senior lives.

Older adults may also benefit from charitable organizations. Good Samaritan Society [] offers housing to low-income seniors in facilities that specialize in independent living, assisted living, and memory care at locations around the country. Volunteers of America operates low-income housing communities in urban and rural areas across 42 states that serve older adults, veterans, and people with disabilities.

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