Crayon, yes your Mom can qualify. A house isn't counted at the time of application and approval.
When were the children's names placed on the Deed? If the names were placed within the 5 year look back, Medicaid could place a lien on the house and obtain all the profits, if any. If the names were placed lets say 6 years ago, then Medicaid would place a lien on your Mother's share of the house.
Medicaid recipients may own a house and a car. These are not counted in the net worth calculations.
When were the children's names placed on the Deed? If the names were placed within the 5 year look back, Medicaid could place a lien on the house and obtain all the profits, if any. If the names were placed lets say 6 years ago, then Medicaid would place a lien on your Mother's share of the house.