How do we access our parent's home equity to pay for their care?

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They no longer have a credit rating to secure a mortgage loan.

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I wouldn't depend on HUDD at this point. It's very hard to get and right now there is no money available. I would try to talk to them about going to an AL. Sell the house and use the money for their care.
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I'd suggest you take a step back and realistically look at
- what care they each need right now, like what are their diseases & abilities
- how are these likely to change within a year for each of them
- are they fixed on staying at home or willing to move into a facility
- what the property value is (& if it's sort of accurate to what it could be sold for). This is an VERY important # as equity lending - like from a Reverse mortgage- will be at best maybe 50% of value. RMs require that insurance(s) updated; repairs & maintenance done as needed; pay taxes & all must happen for RM to stay compliant. When they die or move into a facility like a NH, the debt & interest on the RM is due in full within a few weeks or the RM calls in the mortgage and sells property. The math for RMs are not to the borrowers benefit unless its a rare property that more than doubles in value over the life of the RM as the debt, interest & fees add up significantly. So does their place have assessor value over 350k - 400k?? And with minimal deferred maintenance?

If your folks currently have difficulty covering house costs & upkeep & if property is of modest or low value (like under 100k) doing a RM is imo just putting a band-aid on a much bigger financial problem. They can't afford RM house requirements over time & they can't afford 24/7 ($15k) or 12/5 ($5500 mo) in-home care costs @ $20-25 hr for very long. Their a couple so double costs. Care is very expensive & that's why it's important to realistically know what degree of care they need now and likely for the next year. Unless they can get a huge amount (imo over 300k) of equity $, to me, any equity lending is a waste of time & $.

Sell house, rent in IL or AL and spend down till they qualify for Medicaid & Section 8 housing or can qualify for NH admission. Make sure they get their legal updated so your DPOA & can get them onto lists for housing, access medical records, etc. Good luck, stay organized and try to look at what's the best long view decisions.
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You go on Medicaid instead.
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