Guide
Can Medicaid take the house? The family home and other assets
Updated October 15, 2026 · Reviewed against official sources
"Are they going to take our house?" is a very common question, because for many Latino families, that house is what they built over a lifetime. This guide expands on what we summarized in Does Medicaid pay for nursing homes?.
When applying: when the house doesn't count
For older adults, Medicaid generally uses SSI (Supplemental Security Income) rules to count assets, with some differences by state. Under those rules, the main home isn't counted as an asset. And if your loved one moves into a nursing home, the house still isn't counted in these cases:
- If your loved one has the intent to return home, even if they're away for a while.
- If their spouse or a dependent relative still lives in the house.
The home equity limit
Home equity is what the house is worth on the market minus what's still owed on the mortgage. If it's over your state's limit, the person doesn't qualify for Medicaid long-term care. In 2026, each state sets its limit between $752,000 and $1,130,000.
This limit doesn't apply if the spouse, a child under 21, or a child who is blind or has a disability lawfully lives in the house. The law also allows lowering the home equity with a reverse mortgage or a home equity loan; these are decisions to review with an advisor.
Change already approved: starting January 1, 2028, the maximum limit will be set at $1,000,000, except for homes on agricultural land, because of a 2025 federal law (P.L. 119-21).
Putting the house in a child's name: the 5-year look-back
When your loved one applies for Medicaid long-term care, the state reviews what they (or their spouse) gave away or transferred for less than its value in the past 60 months. If it finds a transfer like that, it applies a penalty period: months when Medicaid won't pay for a nursing home or certain in-home services. It's calculated by dividing the amount transferred by the average monthly cost of a nursing home in the state, and it starts when the person would otherwise qualify for Medicaid.
A detail many families don't know: adding a child as an owner of the house can also count as a transfer, because it reduces the share that belongs to your loved one.
Home transfers the law allows without a penalty
Federal law allows the house to be transferred, without a penalty, to these people:
- The spouse.
- A son or daughter under 21, or a child of any age who is blind or has a disability.
- A brother or sister who already owns part of the house and lived there at least 1 year before your loved one was admitted to the nursing home.
- A caregiver son or daughter who lived in the house at least 2 years before the admission and who, as the state determines, gave care that let their parent keep living at home. You may see this called the "caregiver child exemption."
If you're that caregiving son or daughter, start saving proof early that you lived there and provided care: letters from the doctor, appointments you went to with your parent, the list of medications you managed.
The penalty can also be avoided if the transfer was made for another purpose, if the assets are returned, or if denying Medicaid would cause an undue hardship.
The spouse who still lives in the house
Spousal impoverishment rules protect the husband or wife who stays at home. While they live there, the house isn't counted and the home equity limit doesn't apply. They can also keep part of the couple's savings and receive part of the income of the spouse who lives in the nursing home:
| Protection for the spouse at home (2026) | Amount |
|---|---|
| Assets they can keep (minimum and maximum, depending on the state) | $32,532 to $162,660 |
| Minimum protected monthly income (starting July 1, 2026, all states except Alaska and Hawaii) | $2,705 |
| Maximum protected monthly income | $4,066.50 |
| Standard shelter allowance (starting July 1, 2026, all states except Alaska and Hawaii) | $811.50 |
If housing costs (mortgage or rent, taxes, insurance and utilities) are higher than the shelter allowance, a little more income can be protected for the spouse, up to the maximum. For now, through September 30, 2027, these protections also apply when one of the two gets Medicaid services at home. See Medicaid home care programs.
Can the state put a lien on the house?
Some states can put a lien (sometimes called a TEFRA lien) on the house of a person who lives permanently in a nursing home on Medicaid, if, after notice and a chance for a hearing, the state decides they can't return home. A lien doesn't mean the state takes the house: it's a legal notice that Medicaid will collect what it paid when the house is sold or after the person dies.
A lien can't be placed if any of these people lawfully lives in the house: the spouse, a child under 21, a child who is blind or has a disability, or a sibling who owns part of the house and lived there at least 1 year before the admission. And if your loved one leaves the nursing home and returns home, the lien is removed.
After death: estate recovery
When a person who received Medicaid from age 55 on dies, the state must try to recover what it paid for nursing home care, home and community-based services, and related hospital and prescription drug services. The claim is made against the estate your loved one left, not against the children's own money.
There are important protections:
- Nothing is collected while the spouse is alive.
- Nothing is collected if there's a child under 21 or a child who is blind or has a disability.
- If there was a lien on the house, nothing is collected either while one of these people still lives there, without a break since the admission: a sibling who lived there at least 1 year before, or a caregiver child who lived there at least 2 years before and gave the care that let their parent stay at home.
- Each state must have a process to not collect when it would cause an undue hardship (a hardship waiver), for example, for a home of modest value or a family business that is the family's only source of income.
What counts as the "estate" depends on the state. At a minimum, it's the property that goes through probate; some states also include, for example, a house with joint owners or a living trust.
How to prepare calmly
- Gather the house paperwork: the deed, mortgage balance, property tax assessment and insurance policy.
- Before changing the name on the deed, talk with an elder law attorney. For people 60 and older, the Area Agency on Aging can tell you whether there's free legal help nearby. Find it through the Eldercare Locator: 1-800-677-1116, Monday through Friday, 9 a.m. to 8 p.m. Eastern time; if you prefer Spanish, ask for it when you call.
- Ask the Medicaid agency how they document intent to return, whether they use liens and what they include in the estate.
- Talk as a family about the inheritance and about who cares for whom. Our article on how to talk with your siblings can help, along with power of attorney and advance directives.
If your family is still planning ahead, also see long-term care insurance and how to pay for long-term care.
Frequently asked questions
Do I have to sell my mom's house so she can get Medicaid?
Usually not, if she plans to return, or her spouse or a relative who depends on her lives there, and the home equity is within the state's limit. If no one on that list lives in the house and she doesn't plan to return, it could start to count. Ask before you sell or rent it out.
Can I put the house in my name now to protect it?
A transfer within the 5 years before the application can lead to months without coverage, unless one of the exceptions above applies. Talk with an attorney first.
Do the children inherit the Medicaid debt?
Not as a personal debt. The state can collect from the estate your loved one left, with the protections and exceptions we explained.
This guide is for information only and is not legal or financial advice. Rules vary by state and change every year.
Sources
- CMS/CMCS, Informational Bulletin, April 27, 2026 (updated 2026 standards: spousal impoverishment, shelter allowance and home equity limits): https://www.medicaid.gov/federal-policy-guidance/downloads/cib04272026.pdf (accessed October 15, 2026)
- CMS/CMCS, Informational Bulletin, December 9, 2025 (2026 SSI and spousal impoverishment standards): https://www.medicaid.gov/federal-policy-guidance/downloads/cib12092025.pdf (accessed October 15, 2026)
- CMS/CMCS, Informational Bulletin, November 18, 2025 (P.L. 119-21, section 71108, home equity limit starting in 2028): https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf (accessed October 15, 2026)
- U.S. Code, 42 U.S.C. 1396p (liens, estate recovery, transfers and home equity), GovInfo: https://www.govinfo.gov/content/pkg/USCODE-2023-title42/html/USCODE-2023-title42-chap7-subchapXIX-sec1396p.htm (accessed October 15, 2026)
- eCFR, 42 CFR 435.601 (use of SSI rules for older adults): https://www.ecfr.gov/current/title-42/section-435.601 (accessed October 15, 2026)
- Social Security Administration, POMS SI 01130.100, home exclusion: https://secure.ssa.gov/poms.nsf/lnx/0501130100 (accessed October 15, 2026)
- Medicaid.gov, Estate Recovery: https://www.medicaid.gov/medicaid/eligibility-policy/estate-recovery (accessed October 15, 2026)
- Medicaid.gov, Spousal Impoverishment: https://www.medicaid.gov/medicaid/eligibility-policy/spousal-impoverishment (accessed October 15, 2026)
- CMS/CMCS, Informational Bulletin, August 15, 2023 (spousal impoverishment protections for home and community-based services through September 30, 2027): https://www.medicaid.gov/federal-policy-guidance/downloads/cib08152023.pdf (accessed October 15, 2026)
- CMS, State Medicaid Manual, section 3810 (undue hardship and TEFRA liens), transmittal 75: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/r75sm3.pdf (accessed October 15, 2026)
- ACL, Legal Services for Older Americans Program: https://acl.gov/programs/legal-help/legal-services-elderly-program (accessed October 15, 2026)
- ACL, Eldercare Locator: https://acl.gov/HousingandServices/FindHelp (accessed October 15, 2026)
This is general information, not medical, legal or financial advice. Rules vary by state and by year: confirm with the official agency that applies to you.
Keep reading
Does Medicaid pay for care?
Yes, Medicaid pays for a nursing home if your loved one qualifies. 2026 limits, the 5-year look-back, spouse protections, waivers and how to apply.
Power of attorney and directives
What a power of attorney, health care proxy, advance directive, and guardianship are in the U.S., when to prepare them, and forms in Spanish.
How much care costs
Nursing home, assisted living, adult day care, and home care prices by state (CareScout 2025). What the rate includes, what's extra, and how to pay.
How to talk to your siblings about caring for Mom or Dad
How to hold a family meeting, divide tasks and costs based on what each sibling can give, and stay united while you care for Mom or Dad.
