The cost of senior living is increasing, but while the older generation enjoys a longer life expectancy, they are often challenged to maintain financial security for their later years, especially when it comes to paying for senior care or housing.
There are several government programs that help individuals who qualify to locate and pay for housing:
- Housing Choice Vouchers,
- Public Housing
- Low-Income Housing Tax Credit
- Section 202 Supportive Housing for the Elderly
- Rental Assistance Programs
- Section 811 Supportive Housing
Finding affordable housing is critical to the quality of life for senior citizens. However, retirees who do not have access to additional financial assistance may find their housing to be too expensive. This post will look at the expenditures involved with senior living facilities and how both seniors and their families can pay for them.
What Are the Costs Associated With Housing for Seniors?
Housing for seniors can be extremely expensive, especially if they have to pay out of pocket. The cost of housing for seniors varies depending on numerous factors. For example, the overall price can increase in areas with higher demand or when an individual needs additional medical care.
The cost of senior housing, on average, is between $1,500 to $6,000 per month. Other issues that affect the cost include location, amenities offered by the facility, and what kind of living unit is available.
There are many financial assistance programs created for different age groups to make sure that they can receive affordable housing. Several federal initiatives help fund senior citizen housing, including the HUD Section 202 Supportive Housing for Elderly program.
Six Ways that Seniors Can Find Affordable Housing
When it comes to finding affordable housing as a senior citizen, there are several avenues you can take. These include:
1. Rental Assistance Programs
The Housing and Urban Development section has an online database of states that have rental assistance programs available. For seniors with limited incomes, these programs help provide subsidies for low-income public housing projects or privately owned properties.
Section 811 Supportive Housing for Persons with Disabilities Program
This program offers financial support to developers who are building accessible, supportive housing for persons with disabilities, including seniors, veterans, people living with HIV/AIDS, and others who are impacted by the condition. The development of new homes must be permanent housing that is administered by non-profit organizations or government agencies. This initiative helps pay taxes on new construction projects as well as mortgages and loans.
2. Housing Choice Vouchers
Housing Choice Vouchers are a form of rental assistance provided to people by the government. Seniors who are living on low incomes can apply for assistance from their local public housing agency that administers these programs.
Eligibility depends upon factors such as income, citizenship status, family size, and whether or not they already receive assistance from other federal programs. Assistance is available to those who earn less than 50% of the median income within the area where they choose to reside. Costs are typically covered in full by vouchers that cover all approved expenses, including rent and utilities, plus certain related fees like security deposits and mobile home park lease fees.
3. Public Housing
Public housing is housing owned, operated, and managed by a public housing agency (PHA). It is usually available for families who need help because the costs of maintaining their homes outweigh their incomes. To be eligible for public housing, families must typically fall below certain income thresholds and live in an area where there is a shortage of affordable housing units.
Public Housing was first developed as part of the United States’ New Deal program during The Great Depression to offer safe and sanitary dwellings for low-income Americans. Today’s modern “Public Housing” is funded via annual Congressional appropriations rather than through long-term Federal Reserve credit. In most cases, residents pay rent based on their income.
4. Low-Income Housing Tax Credit
Low-Income Housing Tax Credit is a program that makes markets affordable to low and moderate-income households. It is a Federal tax credit available to developers who meet certain requirements. The LIHTC program was created as part of the Tax Reform Act of 1986 (TRA 86).
Since its enactment, LIHTC has helped millions of families afford safe homes in neighborhoods with good schools and access to jobs. For seniors, it can make a significant difference.
The Local Housing Authority (LHA) has the ability to set rent as a percent of income based on how much one earns. This is normally 30% – 40%.
The LIHTC program did not arise out of thin air. There was a need for affordable housing during the 1980s and before federal subsidies were handed out through Section 235 and 236 of the National Housing Act. The government had predicted these federally subsidized programs by requiring that developers include some units that were affordable to low-income families.
5. Section 202 Supportive Housing for the Elderly
Section 202 is a housing program that provides cash assistance to non-profit organizations that provide affordable housing to elderly persons, defined as those at least 62 years old. Section 202 is a federal housing assistance program designed specifically for our nation’s seniors, who cannot afford safe and comfortable shelter without the government’s help.
The HUD Section 202 Supportive Housing for the Elderly Program helps thousands of low-income older Americans secure affordable rental housing with services that assist them in remaining independent and healthy.
Since 1981, over 1,000 nonprofit organizations have provided affordable low-income housing and related supportive services to nearly 400,000 very low-income senior citizens throughout the United States. These nonprofit sponsors have saved taxpayers millions of dollars by providing decent housing that can reduce or eliminate the need for more costly care in institutions.
In order to receive a Section 202 voucher from a PHA, an applicant must be either age 62 or older or have a disability. Applicants are placed on the waiting list by order of priority according to HUD.
- Priority 1 is given to applicants who are homeless, including those living in other inappropriate housing due to their disabilities;
- Priority 2 goes to very low-income elderly persons without resources or support networks to obtain housing appropriate for their needs, and
- Priority 3 includes all other very low-income elderly individuals.
The Section 202 Program is the only federal housing assistance program dedicated to serving low-income elderly persons. Available funding under this program is limited, and since it is fully funded each year, there are long waiting lists. Each state or territory sponsors its own waiting list through local public housing agencies (PHAs), which operate their own 202 programs within guidelines established by HUD regulations.
6. Veterans Affairs Supportive Housing VASH Program
It was created by congress in 2008 and became a permanent part of HUD’s programs in 2012. The program provides long-term rental assistance for homeless veterans. A key priority is ensuring that veterans receive coordinated access to all of their care and supportive services through cooperation agreements with local service providers, including health care, mental health counseling, substance abuse treatment, guaranteed issue of Social Security benefits, and more. In addition, there are property managers who help manage properties, so they do not fall into disrepair.
The VASH program provides long-term case management and clinical services to help chronically homeless veterans. Case managers work with each veteran to assess unmet needs, such as substance abuse treatment, mental health counseling, or assistance in obtaining other benefits. The goal of the program is for every participating veteran to receive permanent housing and supportive services so that they can lead productive lives within the community.
How Can Seniors Pay for Housing?
Many seniors will receive financial assistance from the government or nonprofit agencies that can help them pay for housing. Families can also contribute to their loved one’s living arrangements in order to ensure they are receiving the best care possible.
Savings, retirement accounts, pensions, social security, long-term care insurance, investments, backing from family members, equity in their house, or a combination of these are the most frequent ways for seniors to pay for housing.
Seniors who receive a monthly pension payment or participate in a 401(k) retirement plan may find themselves upside down when it comes to covering the cost of housing.
Using Pension, Investment, and Retirement Account Funds
Transferring pension funds to spouses or other family members is an option for senior citizens with retirement accounts and pensions. Another alternative is to withdraw money from the account by taking a lump-sum distribution up to the amount that will not incur an early withdrawal penalty and then invest this cash elsewhere for a time period until it can be utilized as a complete resource.
Pensions are frequently paid out in monthly installments, making it more difficult to convert them into instant money. If pension holders believe they will need the cash quickly, they should contact their pension administrators and plan ahead as much as possible.
Seniors who want to access the money they have set aside in their retirement accounts can borrow against them through annuities or reverse mortgages. They may also borrow against their life insurance policy’s death benefit, but they should check the small print of the policy to ensure this is an option.
Savings, Family Assistance and Home Equity
There are various alternatives for seniors who are unable to access other resources or who do not have much money. Some nursing homes, for example, provide installment payment plans so that nonpaying people may pay off their care costs over time with payments made on a monthly or weekly basis until their retirement years are complete.
Family members are also frequently sought for aid. When relatives volunteer to assist with the expenses of their elderly family member, there are a variety of options for how this help can be provided.
Other Programs to Help Seniors Find and Pay for Housing
There are many other programs that exist to help seniors remain in their homes and communities as they age. These include community-based services, which link home care with support from local groups, families, and friends.
Medicare and Medicaid are two public assistance programs for senior citizens. Both can be used to assist in paying for assisted living services. Most people are aware that Medicare is available to all seniors over the age of 65 who have paid into the system either through payroll deductions during their working years or via self-employment.
Medicaid provides assistance in many areas, including paying for prescription drugs, medical supplies, and personal care items, inpatient and outpatient hospital expenses, nursing homes, dental treatment and care, and wheelchairs.
The Hope program is a demonstration that links rental assistance with case management and supportive services to assist very low-income older adults in maintaining their own homes by preventing their premature transfer into nursing homes.
The program provides assistance to low-income families with disabled and/or elderly individuals who live in or are willing to move into rental units that satisfy Section 8 Housing Quality Standards.
In order to be considered for Social Security Disability benefits, an applicant must have:
- A disability that meets the requirements for such benefits (SSD or SSI).
- A physical, mental, or emotional frailty that is expected to last for a long time and be very difficult to cure (for example, someone in a wheelchair who is working but not receiving Social Security benefits because of their job and income) or
- A developmental disability.
The Hope program, along with the others mentioned above, can help seniors find and pay for more affordable housing. In conjunction with programs like Medicaid and Medicare, seniors may have an easier time affording care and housing as they age.
People need lots of different types of support when they’re growing older, which is why there are so many different types of senior housing available. Some people prefer living near family members who can come over for meals or help them out with chores. Others enjoy being part of a larger community, participating in activities, or having neighbors close by who can watch out for them if something happens while they’re alone.
From savings to family assistance, there is a solution for everyone. Non-Profit Organizations Many non-profit organizations offer discounts on senior community rooms in senior apartments and discounted assisted living services, such as meals and transportation.