Mom and I are Joint Tenants and co-borrowers on the loan since 2004 (and a previous house, 2001-2004). Mom pays a majority of the bills as my income is much lower, but I do most of the work. Do I have to proove 'Fair Mkt Value' for the past 5 yrs because we live together? We were building a small 'hobby farm' until her stroke a year and a half ago. My income alone will not support this house. Spousal impoverishment laws seem to apply to our situation, but not our relationship.

With penalties for gifting, can she pay me for personal care as long as she lives at home? We can transfer her half of the house to me after 2 yrs, but if I can be paid during those 2 yrs, maybe I can pay the mortgage for awhile when she needs to move to an Adult Family Home and takes her monthly retirement income with her. She has a Roth IRA and a retirement acct. that I'm assuming must be spent down before application for Medicaid. These accts. don't hold enough to make a difference in monthly expenses if used to pay down the principal. Also, we already refinanced to a low rate. So that doesn't help either.

Is my only option to hope she can stay home long enough to transfer title, then stay home long enough that I can sell the house when prices improve, rather than give it back to the bank? I looked into buying down, but that would put us in dangerous neighborhoods. We also have pets that graze and can't live in a condo in town. Bankers don't want to hear about pets, so I assume Medicaid won't either.

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