In December 2014 I bought a house with my sister-in-law's mother. I put up all of the down payment for the mortgage. Both of our names are on the mortgage. Now she needs to go into long term nursing facility and cannot afford it without applying for Medicaid. Am I going to have to sell the house in order for her to qualify?

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Thus s going to pse all sorts of probems -
You need to do something to establish the downpayment was all your $ and that housemate either owes you or her % of ownership is reduced due to the downpayment. It's not a DIY you need an atty. a good real estate atty.

Who is going to be her DPOA MPOA and executor as per her will? I'd be real concerned who it is and how responsible they feel for her ever fulfilling her agreements. This could go real bad in your favor later on if like the executor does not deal with estate recovery and a lien is placed on the house and then 10 yrs from now when you sell, you cant do so without expensive complications.

Also are you dependent on her paying her part of the mortgage? If so, once she goes onto NH medicaid she is required to have all her monthly income be her cay to the NH less a very small personal needs allowance. if whomever is her DPOA could care less about you or her debt, you will end up paying all the mortgage and no recourse to get her to pay.

And you just can't remove her from the mortgage as lenders will most likely require the mortgage be cancelled and then a new mortgage to you. They could care less if she didn't put any downpayment or paid the note. It's jointly held.

I'd see a real estate atty & ASAP. Like before she ever applies for Medicaid. Personally I'd say you are going to be faced with really hard choices in all you sue her for not carrying out her agreement on house.

Also your SIL may just love love LOVe you but if the choice is between her mother & you, well it's probably not going to be in your best interest. Good luck.
Helpful Answer (3)

One usually doesn't need to sell the house to qualify.... since your housemate owns half the house, then Medicaid would place a lien on 50% of equity. You can continue using the house until your housemate passes on, then Medicaid would want to be reimbursed. Check with your State Medicaid office to verify as each State has their own rules and regulations. Hopefully you can prove the down payment was from your own funds, not hers.
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