Can I get a reverse mortgage if I am on disability?

Social Security Disability Insurance (SSDI) is treated identically to Social Security retirement income in the HECM financial assessment. Both are Social Security Administration programs that pay regular, reliable monthly benefits. The financial assessment counts SSDI in full as recurring income. The award letter or benefit verification statement from SSA serves as the income documentation.

VA disability compensation deserves specific attention because it has two favorable characteristics that make it particularly strong income documentation for the financial assessment: it is guaranteed by a government program (reliable, not subject to employer decisions), and it is tax-free income. Tax-free income means the gross amount available for spending is higher than an equivalent amount of taxable income — which is favorable in the residual income calculation context.

The important distinction is between SSDI and SSI. SSDI is a disability insurance program based on prior work history — it is not means-tested and is not affected by assets or reverse mortgage proceeds. SSI (Supplemental Security Income) is a needs-based program with an asset limit of $2,000 for individuals — and reverse mortgage draws held in a bank account at month-end can count toward this asset limit. SSDI borrowers have full freedom to draw from a reverse mortgage without concern about asset limits. SSI borrowers must manage draw timing carefully.

Private disability insurance payments count as recurring income with appropriate documentation — typically a current benefit statement from the insurance company showing the monthly benefit amount. Private disability benefits often have time limits or conditions, so the underwriter may verify that the benefit is expected to continue beyond the near term.