Would an advance on a reverse mortgage heloc be counted as an asset for Medicaid?

Which is it a free-standing HELOC or a reverse mortgage (RM)?

If it is a RM, does the contract require the couple to both be continuing to be fully residing in the home in order to be in compliance?

Whether a reverse mortgage or home equity line of credit, the transfer, even if made directly to an institution, will be considered a gift for Medicaid eligibility purposes. This is the case whenever fair market value compensation is not received in exchange for the transferred asset.

What may work in this circumstance is a promissory note. There is no prohibition against a prospective Medicaid applicant entering into a loan agreement as long as a fair market interest rate is being charged, there are no "balloon" payments, and there are no "forgiveness" clauses...essentially establishing what can be considered an "arms length transaction". With interest rates so low, this may be the way to go...exercise the institutional loan and then create the personal loan. (The loan should be made by the well spouse).

A reverse mortgage does affect Medicaid eligibility. You need independent competent financial and legal advice before obtaining a reverse mortgage if you have Medicaid.

Medicaid takes a dim view of home equity loans and reverse mortgages and will demand to know where ALL the money went. Gifts, such as paying a grandchild's tuition will result in a penalty. Keep good records.

Can I get a HELOC without affecting my Medicaid or disability benefits?

A home (primary residence) and the equity therein is not considered an asset for Medicaid eligibility purposes. Cash created by extracting home equity (by whatever method), though not considered income, IS considered a countable asset and may very well cause ineligibility unless transferred the same month it is received via a method that will also not cause ineligibility (e.g., direct gifts are not permitted).