Yes, you can qualify for an FHA loan using Social Security income, and a social security income mortgage is underwritten like any other FHA purchase loan. Lenders can treat the benefit as stable, reliable income when it is documented and expected to continue. Retirement age does not disqualify you, and neither does having no paycheck.
The real questions are practical: which benefits count, what paperwork proves them, how a lender adjusts nontaxable income, and what the resulting debt-to-income ratio looks like once mortgage insurance and property tax are added. This article works through each of those, with a full worked example built on Henrico County tax rates.
Which Social Security Benefits Count as FHA Qualifying Income
Under HUD Handbook 4000.1, the FHA underwriting reference, retirement, survivor, and Social Security Disability Insurance (SSDI) benefits can all be used to qualify. Supplemental Security Income (SSI) can also qualify with proper documentation. The handbook’s income section is updated periodically, so confirm the current wording at HUD’s Handbook 4000.1 page. This article reflects the guidance as understood in October 2026.
The continuance rule
Continuance means the income is likely to keep arriving. For FHA, that generally means at least three years from the date the FHA case number is assigned. An award letter, the benefit verification letter from the Social Security Administration (SSA), that shows no end date usually satisfies this. Retirement and survivor benefits are typically paid for life, so they rarely raise questions.
Extra care is needed in a few situations:
- SSDI with a scheduled medical review date, which has to be checked against the award letter.
- Child or dependent benefits with a stated end date, such as a benefit that stops when a child reaches a certain age.
- Any benefit the letter describes as temporary or under review.
If a benefit ends within three years, it generally cannot be counted, though your other income still can be.
Terms worth knowing
The benefit year is the calendar year the SSA letter covers, and its amounts reflect that year’s cost-of-living adjustment. A gross-up is the upward adjustment of nontaxable income, covered in a later section. Your debt-to-income ratio (DTI) compares monthly obligations to monthly income.
Age is not a denial reason
A common belief is that retirees cannot get mortgages. The Equal Credit Opportunity Act, implemented by Regulation B, prohibits credit discrimination based on age and on the fact that income comes from a public assistance program. The CFPB’s Regulation B resource explains these protections. A lender evaluates whether your income is documented, stable, and sufficient. It cannot discount that income because of your age or its source.
Documents Duane Buziak Asks For When Social Security Is Your Income
The file for a Social Security borrower is shorter than most, which is one reason these applications often move smoothly. Duane Buziak typically asks for the following.
- SSA benefit verification letter. This is the award letter for the current year. You can download it from a my Social Security account at ssa.gov. It states your gross monthly benefit and shows any Medicare premium deductions, so the lender can see the amount before withholdings.
- Proof of receipt. Recent bank statements showing the monthly deposit, or the SSA-1099 for the prior tax year, let the underwriter match actual payments to the letter. The deposit will usually be lower than the gross figure because of Medicare premiums.
- Other retirement income. Pension statements, or 401(k) and IRA distribution statements, with evidence the payments will continue for at least three years. For a retirement account, that often means showing the balance can support the distributions over that period.
- Tax returns, when relevant. Two years of returns are needed if self-employment or other non-benefit income is part of the application. They also help document how much of your Social Security is taxable, which matters for the next section.
Pull the letter early
Benefit letters reflect the cost-of-living adjustment (COLA) for the current year. The SSA announced a 2.8 percent COLA for 2026 (see the SSA’s COLA page to confirm the current figure), so a letter pulled in 2025 will show a lower amount than one pulled now. Using a stale letter can understate your income, and an outdated amount will not match your recent deposits.
Download the letter before you start house hunting. If your first attempt to open an online account stalls on identity verification, you want to learn that before you have a contract deadline.
Grossing Up Nontaxable Social Security Income
Social Security benefits are partly taxable for some households and entirely tax-free for others. Because FHA qualifying ratios are measured against pre-tax income, guidelines let a lender adjust nontaxable income upward to reflect what you would have had to earn to take home the same amount. FHA guidance commonly allows an adjustment of 15 percent, meaning the nontaxable amount is counted at 115 percent. Handbook 4000.1 is the authority for the current percentage and any conditions, so verify it there before relying on this figure.
Why it helps
A higher qualifying income lowers the DTI, because the same housing payment and debts are divided by a larger number. For a borrower whose benefit is entirely nontaxable, the gross-up can be the difference between a ratio that needs special approval and one that fits standard benchmarks.
Who decides what is taxable
Taxability depends on your “combined income,” which under IRS rules adds adjusted gross income, nontaxable interest, and half of your Social Security benefits. Thresholds then determine whether none, some, or up to 85 percent of the benefit is taxable. IRS Publication 915 lays out the worksheet. A lender does not make that call, and neither does Duane Buziak. A tax professional does, and your tax returns document the result.
A common mistake
Many borrowers assume the entire benefit is grossed up. Only the nontaxable portion qualifies. If your returns show that 85 percent of the benefit is taxable, only the remaining 15 percent is eligible for the adjustment. The taxable part is counted at its face amount. Getting this wrong early leads to an inflated estimate of how much you can borrow, so run the numbers from your actual returns, not from a rule of thumb.
Worked Example: Social Security Income, Debt-to-Income, and Total Monthly Cost in Henrico County
The following is an illustration, not a quote or an approval. The borrower, the home price, and the interest rate are hypothetical.
Suppose a retired borrower receives $3,200 a month in Social Security, entirely nontaxable per her returns, plus a $900 monthly pension. She is buying a $175,000 home in Henrico County with 3.5 percent down, has a car payment of $250 and credit card minimums of $60, and has a credit score above 580.
Qualifying income
- Social Security grossed up at 115 percent: $3,200 x 1.15 = $3,680
- Pension (taxable, counted as is): $900
- Total qualifying income: $4,580 per month
Loan amount
- Down payment: $6,125, leaving a base loan of $168,875
- Upfront mortgage insurance premium (UFMIP) of 1.75 percent, financed: $2,955, for a total loan of about $171,830
Monthly housing cost
- Principal and interest at a hypothetical 6.50 percent, 30 years: about $1,086
- Annual MIP at 0.55 percent: about $77 a month in the first year. This is the rate for a 30-year term, a loan-to-value above 95 percent, and a base loan at or below $726,200 (HUD Mortgagee Letter 2023-05). It declines slightly as the balance falls.
- Henrico property tax at $0.85 per $100 (per the county’s real estate assessments page), assuming assessment at the purchase price: $1,487.50 a year, or about $124 a month
- Homeowners insurance, an estimate for illustration: $100
- Total: about $1,387 per month
The ratios
The front-end ratio (housing cost to income) is $1,387 / $4,580, or about 30.3 percent. The back-end ratio adds $310 in debts: $1,697 / $4,580, or about 37.1 percent. Both fit within FHA’s standard 31/43 benchmarks, and automated underwriting can approve higher ratios when other factors are strong. Confirm current benchmarks in Handbook 4000.1.
Without the gross-up, income would be $4,100, and the ratios would be about 33.8 and 41.4 percent. The adjustment moved the front-end ratio under the standard benchmark.
County comparison
The same home taxed at Chesterfield’s $0.89 per $100 (chesterfield.gov/823) would add about $6 a month. At Hanover’s $0.81 (hanovercounty.gov/386), it would save about $6. Rates change, so confirm them with the county before relying on them.
FHA Credit, Down Payment, and Loan Limit Rules That Apply to Retirees
Social Security income answers the question of whether you can document earnings. Credit, down payment, and loan limits determine the rest.
Credit score tiers
- 580 and above: eligible for the 3.5 percent minimum down payment.
- 500 to 579: eligible with at least 10 percent down.
Individual lenders can set stricter minimums, known as overlays. A score one lender accepts may be declined by another, which is why the lender matters as much as the program. Duane Buziak can check where you stand using the NoTouch Credit Pull, a soft pull that does not create a hard inquiry.
2026 loan limits
For case numbers assigned on or after January 1, 2026, the one-unit FHA floor is $541,287 and the ceiling is $1,249,125, per HUD Mortgagee Letter 2025-23 (see HUD’s mortgagee letters). Your county’s exact limit is in HUD’s FHA mortgage limits lookup. Check the Henrico and Richmond-area figure there before you shop, since it sets the ceiling of your price range.
Where the down payment can come from
Acceptable sources include savings, withdrawals from a retirement account, and documented gift funds. Retirement withdrawals need statements showing the source of funds and that the money has been in place long enough to be considered seasoned. Large unexplained deposits will be questioned.
The FHA advantage
FHA’s 3.5 percent minimum down payment and willingness to consider scores starting at 580 give fixed-income buyers an entry point that programs with higher credit requirements may not. Keeping savings in reserve instead of tying it up in a large down payment matters when retirement income is fixed. Mortgage insurance is the trade-off: as noted, annual MIP applies for the life of the loan when the down payment is under 10 percent.
Applying With Duane Buziak: Pre-Approval Steps and State Notes for VA, FL, TN, GA, and DC
Duane Buziak is a mortgage broker, not a lender. Through 500+ wholesale lender relationships, he can compare FHA lenders and look for one whose overlays suit Social Security and fixed-income borrowers. Large national lenders such as Rocket and Movement operate their own single set of guidelines. A broker can compare more than one. The Dare to Compare challenge invites you to test his pricing against any quote you have.
The steps
- Download your SSA award letter and collect two months of bank statements and any pension or IRA statements.
- Start with a NoTouch Credit Pull to see your credit picture before any hard inquiry.
- Get pre-approved, so your budget is based on documented income.
- Make an offer, then order the appraisal. FHA appraisals include minimum property standards, so condition matters.
- Complete underwriting, then close. Ask Duane about no-out-of-pocket closing options if cash to close is a concern.
State notes
Virginia is the primary market, and county tax rates in the Richmond metro area differ, as the Henrico, Chesterfield, and Hanover figures show. In Florida, the homestead exemption under Fla. Stat. 196.031 can reduce taxable value by up to $50,000 for a primary residence, but it generally applies only once you own and occupy the home on January 1, so it will not help in your first year. Verify the details with the county property appraiser. In Tennessee, Georgia, and the District of Columbia, tax rates and relief programs vary widely by locality, so check with the local assessor before budgeting.
Bringing Your Award Letter to a Review With Duane Buziak
Social Security income is eligible for FHA financing when it is documented and expected to continue. The work is in the details: the continuance date, the taxable portion, the gross-up, and the full monthly cost including MIP and county tax.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how our award-winning team can help you navigate the path to your new home with competitive rates and expert guidance. FHA Mortgages by Duane Buziak offers access to 500+ wholesale lenders, a NoTouch Credit Pull with no hard inquiry, the Dare to Compare pricing challenge, and no-out-of-pocket closing options. Call 804-212-8663 to have your award letter reviewed, or visit 4860 Cox Rd, Glen Allen, VA 23060.
