You’ve heard that applicants need to meet an asset limit to qualify for Medicaid, which makes you think there’s no way your parents can be eligible because they own their home. The home may not be worth much, but you’re worried its value will put them over the asset limit. They can’t afford long-term care on their own, so what can they do? Will they have to sell their home to qualify?

These are common concerns for many seniors who own homes, and their families, but there may not be a need to worry. In many cases, owning a home won’t prevent you or your loved one from qualifying for Medicaid’s long-term care coverage. To learn more about the impact of owning a home on Medicaid eligibility, keep reading or contact us.

Why Owning a Home Might Impact Medicaid Eligibility

Seniors need to meet several requirements to qualify for Medicaid’s long-term care coverage, including an asset limit. In most states in 2025, the individual asset limit for Medicaid’s long-term care coverage in a nursing home or in the home is $2,000, which means applicants and beneficiaries must have $2,000 or less in countable assets to gain and maintain their eligibility. Most assets are countable when it comes to Medicaid’s asset limit, including bank accounts, retirement accounts, certificates of deposit, stocks, bonds, cash and any other valuable assets that can be easily converted into cash. The asset limit in most states for married couples with both spouses applying in 2025 is a combined $3,000 or $4,000.

However, not all assets count toward Medicaid’s asset limit. Some are exempt, including clothing, personal items like wedding rings, household furniture, essential appliances, a primary vehicle and, depending on the circumstances, a primary home. To be clear, second homes or vacation homes can not be exempt.

When is the Home Exempt from Medicaid’s Asset Limit?

There are multiple situations and rules that can lead to a home being exempt from Medicaid’s asset limit for eligibility. Some of these may happen organically, and some will require action.

• The home will be exempt if the applicant lives there and their home equity interest is below the state’s home equity interest limit. Home equity interest is the portion of the home the applicant owns minus any outstanding debt, like a mortgage. In most states in 2025, the home equity limit is $730,000, and it’s $1,097,000 in states with higher property values. This exemption is especially helpful for seniors who want to receive their Medicaid-covered long-term care at home as opposed to a nursing home.
• The home will be exempt, regardless of the beneficiary’s home equity interest, if the applicant’s spouse, minor child or disabled child of any age lives there. This exemption is especially helpful for married couples with just one spouse applying for Medicaid coverage in a nursing home.
• Medicaid rules prohibit applicants from simply transferring ownership of their home to become eligible, unless the applicant uses the Child Caregiver Exemption or the Sibling Exemption. The Child Caregiver Exemption lets applicants transfer their home to an adult child who has been living in the home for at least year and during that time provided care that helped their parent remain at home instead of moving to a nursing home. The Sibling Exemption allows applicants/beneficiaries to transfer their home to a sibling co-owner of the home.
• Some states will not count the home toward the asset limit if the sale of that home would lead to undue hardship for one of its co-owners. Losing their place of residence is usually the hardship a co-owner would face, but if the home is also a place of business then the sale could also lead to undue hardship due to a loss of business.

For Medicaid purposes, a home can be a single-family dwelling, a multi-family building, a condominium, a co-op apartment, a house boat or a mobile home, with or without land.

How Intent to Return Home Keeps Your Home Safe from the Asset Limit

If a Medicaid applicant or beneficiary files an “intent to return home” statement with the state, their home can be exempt from the asset limit even if no one is living in it. Intent to return home statements are formal, written documents which clearly express that even though the Medicaid applicant/beneficiary does not live in the home, or is planning to move out shortly, they still consider it their primary home and they intend to return living there if their health allows.

Some states have specific intent to return home forms for filing this kind of statement, but there is no universal form for all 50 states. In general, these statements should include the name and signature of the Medicaid applicant or beneficiary, the address of the home they intend to return to and the date.

In many states the intent to return home statement will still be valid even if there is no realistic chance of the Medicaid beneficiary returning home. However, some states do require there is an actual chance for the beneficiary to return home, and those states may ask for a statement from a healthcare provider expressing that opinion. And most states set time limits of 6 months to 1 year on intent return statements. So, even if the state accepts an intent to return home statement initially and doesn’t count the home toward the asset limit, if the Medicaid beneficiary has still not returned home after the time limit is up the home will then count toward the asset limit and the beneficiary can lose their Medicaid coverage.

In these situations, it can be very helpful and reassuring to have a Certified Medicaid Planner on your side. Not only will they know the intent to return rules in your state, they’ll know what to do if the intent to return time limit runs out and the home suddenly becomes countable.

Using a Medicaid Asset Protection Trust to Make Your Home Exempt

Any asset placed in a Medicaid Asset Protection Trust (MAPT) will not be counted toward the asset limit. In order to be approved by Medicaid, these kind of trusts have to meet several criteria, including being irrevocable, which means it can’t be changed or canceled once it’s created. Medicaid Asset Protection Trusts must also have a “trustee” (manager) who is different than the person who owns the trust, also known as the grantor. Medicaid Asset Protection Trusts must also name a beneficiary (the person who will control the trust after the grantor’s death) who is different than the grantor.

Most importantly, Medicaid Asset Protection Trusts must be created at least five years ahead of the homeowner applying for Medicaid. That’s because of the Look-Back Period, which we’ll discuss next. More on using a MAPT.

Medicaid’s Look-Back Period

To prevent Medicaid applicants from just giving away their assets (including the home) or selling them below market value in order to qualify, Medicaid uses the Look-Back Period. In most states, the Look-Back Period is five years. This means that Medicaid officials will “look back” into an applicant’s financial history for the five years (60 months) immediately preceding their application date to see if they have given away any assets or sold them at less than fair market value.

If the state finds a Look-Back Period violation, the application will be denied and the applicant will face a penalty period of ineligibility. During this time, they will not be allowed to reapply for Medicaid. The length of the penalty depends on the state and the amount of assets the applicant gave away or sold at less than fair market price.

As mentioned above, placing a home in a Medicaid Asset Protection Trust violates the Look-Back Period. So, to use one of these trusts to keep a home exempt a potential Medicaid applicant would need to create and use the trust at least five years in advance.

There are two state exceptions to the Look-Back Period: California and New York. In California, there is no Look-Back Period for people applying for long-term care coverage at home through Medicaid Waivers. And the Look-Back Period is 30 months for individuals applying for nursing home coverage, although that will be phased out by July 2026.

In New York, there is no Look-Back Period for people applying for long-term care coverage in the home home via Medicaid Waivers, but that is subject to change on March 31, 2024. New York’s Look-Back Period for nursing home coverage through Medicaid is the standard 60 months (five years).

What To Do If the Home Is Not Exempt

If there are no circumstances or exemptions that make a home exempt, individuals may have to sell the home in order to qualify for Medicaid long-term care coverage. The applicant would still be ineligible after the sale of the home because the proceeds from the sale would (presumably) put them over the asset limit, but they could then “spend down” those assets on the long-term care they need. When they spend enough of their money to meet the asset limit, they can re-apply for Medicaid.

Some seniors might find themselves needing to sell their home after they have already been approved for Medicaid and are receiving benefits. For example, if the beneficiary’s spouse who was living in the home passes away, the home will go from exempt to countable and will likely push the Medicaid beneficiary over the asset limit. They can file an intent to return if their state allows it, but eventually they may need to sell the house, get disqualified from Medicaid, pay for their long-term care on their own and then re-apply when the proceeds from the sale of house are all spent.

Selling a home while you’re applying for of receiving Medicaid is a complicated process. Before attempting to do it on your own, consult with our team of professionals at Eldercare Resource Planning.

How a Certified Medicaid Planner Can Help

If the home is not exempt and you or your loved one needs to sell to qualify for Medicaid, having a Certified Medicaid Planner on your side is essential. They will be able to figure out the complex timing it takes to coordinate the sale of the house, Look-Back Period violations and the out-of-pocket budget from the profits so you or your loved one never has a gap in long-term care coverage.

Certified Medicaid Planners can also help if you’re not sure whether or not your home is exempt. They can calculate your home equity interest and they will know the home equity limit in your state. They’ll also know about any available undue hardship waivers and if your situation would make them relevant. They can tell you if the Child Caregiver Exemption or Sibling Exemption will work for you, and if they do, a professional planners can make sure you use those exemptions properly. If you reach out far enough in advance, they can also help you correctly use a Medicaid Asset Protection Trust to gain eligibility.

Our Certified Medicaid Planners know if your state offers the kind of in-home Medicaid coverage that will work for your health situation and allow you to live at home. If you do have to go to a nursing home or an assisted living facility, our team of professionals will help you file an “intent to return home” statement that can make the home exempt. They’ll know which forms to use, if you need statements from your doctors and what the intent to return statute of limitations might be.