Retiring on a fixed income does not preclude you from getting a home loan. You may not qualify for a larger mortgage that requires more earned income. Still, you can get a home loan with Social Security alone. However, not having regular income from a job or retirement accounts will make securing a mortgage more challenging. Below, we’ll explore what to keep in mind as you apply for a mortgage with only Social Security benefits. Meanwhile, a financial advisor can help you plan for retirement, including finding the best time to claim Social Security.
Can a Senior Get a Mortgage?
The short answer is yes. Lenders do not impose an age limit on mortgages. The Equal Credit Opportunity Act bars lenders from discriminating against borrowers based on race, religion, nation of origin and age. The federal law also prohibits discrimination in credit transactions when an applicant receives public assistance, including Social Security.
That means if you’re a senior citizen and your only source of income is Social Security benefits, lenders cannot turn you away simply due to your age or the public assistance that you receive. However, you must keep in mind that lenders will consider your monthly income when deciding whether to approve your mortgage application. A fixed or limited income derived solely from Social Security benefits may not be enough for a lender to extend you a home loan.
How to Get a Mortgage Using Only Social Security Income
Getting a mortgage when your only income is Social Security benefits is no different than applying for a home loan when you have a job. You’ll need a down payment, proof of income, a qualifying debt-to-income ratio and a viable credit score. However, satisfying these other requirements becomes even more important when your only source of income is Social Security.
Credit Score
Most mortgage lenders require a minimum credit score of 620, although some lenders may require an even better credit. And if your only source of income is Social Security, a higher credit score may improve your application.
Debt-to-Income Ratio
Mortgage lenders will also review your debt-to-income ratio, the percentage of your gross income needed to cover monthly debt payments (including your mortgage). Lenders typically require a debt-to-income ratio of 43% or less. This means no more than 43% of your gross income can go toward your mortgage, car payments, credit cards and other debts. With Social Security benefits being your only form of income, not carrying any debt (other than your mortgage) will be vital. We’ll show you why in our example below.
Down Payment
The size of your down payment that’s required will hinge on the type of loan you’re looking to secure. While you’re able to get a Federal Housing Administration (FHA) loan with as little as 3.5% down, your lender may require you to put significantly more down if your only income comes from Social Security. Using a larger down payment will also reduce the size of your loan and, as a result, lower your debt-to-income ratio.
Proof of Income
Most lenders verify income as part of the application process. For most applicants this means submitting recent paystubs and a W-2. If you’re on Social Security, you’ll need to submit a Social Security verification letter to the lender. You can request a benefit verification letter online by creating an account on the Social Security Administration website.
‘Grossing Up’ Social Security Income for a Mortgage
While it will be more difficult to qualify for a mortgage with Social Security benefits as your only source of income, there is good news. Lenders give special consideration to nontaxable income, which includes disability benefits, child support payments and even a portion of Social Security benefits.
What Is ‘Grossing Up’ Income?
Lenders considering a conventional mortgage application can “gross up” this nontaxable income and treat it as if it’s worth up to 25% more. Although it’s important to note that not all lenders will do this. Some may opt to gross up your income by a smaller percentage.
How much of your Social Security benefits are subject to income tax will depend on your combined annual income and tax filing status. Beneficiaries who file their tax returns as individuals don’t pay any federal income tax on benefits if their combined income is less than $25,000. If you collect $20,000 per year in Social Security and have no other income, your lender may gross up that amount. As a result, they might treat it as $25,000 for a conventional loan, helping you qualify for a larger mortgage.
How Social Security Income Is Taxed
Individuals with a combined income between $25,000 and $34,000 may pay federal income tax on up to 50% of their Social Security benefits. If their combined income is more than $34,000, up to 85% of those benefits will be subject to income tax.
Couples that file joint returns pay income tax on up to 50% of their benefits if their combined income is between $32,000 and $44,000. The IRS taxes up to 85% of benefits if a couple’s combined income surpasses $44,000.
That means a portion of every beneficiary’s Social Security benefits (between 15% and 100%) is nontaxable and can be grossed up during the mortgage application process.
Can You Borrow Money from Your Social Security?
You cannot borrow directly from your Social Security benefits. The program does not offer loans or allow you to withdraw future benefits early, even if you’re hoping to use the money to buy a home. Social Security is designed to provide steady, monthly income during retirement, not lump sums or advances.
For those considering a reverse mortgage, this type of loan may allow you to tap into your home equity without affecting your Social Security payments. However, reverse mortgages come with their own rules and risks, so it’s worth reviewing the details carefully before proceeding.
What Getting a Mortgage May Look Like for You
Let’s say that you and your spouse each collect the average monthly Social Security check for a retired worker, which in February 2025 was around $1,980. Since you have no other streams of income, your annual receipts as a couple are $47,520 ($23,760 x 2). Unfortunately, your lender does not gross up nontaxable income, so your home loan value will be based on your monthly income of $3,960.
Thankfully, you do not have any other debt, have an excellent credit score and have enough cash saved to make a down payment of $50,000.
So what can you afford with only Social Security income? Remember, lenders will cap the size of your home loan so your debt-to-income ratio does not exceed 43%. This caps your monthly mortgage payment at $1,703 ($3,960 X 0.43). Your final loan amount depends on your lender and prevailing rates.
As you can see, having only Social Security income will limit the amount of money a lender is willing to loan you. As a result, you may need a larger down payment to buy a home under these circumstances.
Bottom Line
Getting a mortgage with only Social Security income is possible, but not easy. Thankfully, federal law protects seniors from being discriminated against based on their age or the public assistance they receive when applying for a mortgage.
If you’re looking to get a mortgage using only your benefits, you’ll need to have a strong credit history, show proof of your Social Security income, have a debt-to-income ratio under 43% and have cash for a down payment. If your lender is willing to gross up your income, you may qualify for an even larger loan.
Tips for Getting a Mortgage
- A financial advisor can help you get your financial house in order before you apply for a home loan. This may include setting a budget, saving for a down payment and analyzing your monthly expenses. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Speaking of setting a budget, SmartAsset’s mortgage calculator can help you estimate how much your monthly payment will be based on the price of the home and the size of the loan you’re getting from a lender.
- Before selecting a lender, be sure to shop around for a low interest rate. SmartAsset’s mortgage comparison tool will help you assess your options on the market and hopefully find a lender that suits your needs.
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