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- ABLE accounts allow individuals with disabilities to invest and save without losing means-tested benefits like SSI.
- Money from these accounts can be used for any “qualified disability expense,” including purchasing a home.
- In 2024, ABLE account owners can receive up to $18,000 in contributions. You can have up to $100,000 total without impacting SSI limits.
Saving for homeownership as a person with a disability can be challenging. Many individuals with disabilities receive benefits, such as Supplemental Security Income, that limit how much money recipients can have in savings.
ABLE accounts — or Achieving a Better Life Experience accounts — provide those with disabilities an opportunity to save enough to purchase a house without putting their benefits at risk. In fact, according to the Social Security Administration, ABLE account owners had an average of nearly $10,700 saved in their accounts — enough for a 3% down payment on a $350,000 house.
Are you disabled and hoping to buy a home? Here’s how an ABLE account may be able to help.
What is an ABLE account?
ABLE accounts are also known as 529 ABLE or 529A accounts, and they’re state-run savings accounts specifically for disabled individuals.
Definition
ABLE accounts are a product of the Achieving a Better Life Experience (ABLE) Act of 2014. They’re tax-advantaged savings and investment accounts for people with disabilities.
Funds in ABLE accounts can be used toward qualified disability-related expenses. We’ll go more into these details further down.
Eligibility
Eligibility requirements vary by state, but generally speaking, to be eligible for an ABLE account, your disability must have begun before age 26 (though in 2026, the age threshold will increase to 46.) You must also be receiving Social Security Disability benefits or have a disability certificate signed by your doctor.
To open an ABLE account, you’ll need to choose a state program to participate in. Currently, 46 states and Washington, DC, have ABLE programs, according to the ABLE National Resource Center. Many programs allow out-of-state residents to open accounts, so you don’t necessarily need to use your state’s program.
Currently, Idaho, North Dakota, South Dakota, and Wisconsin don’t have active programs. If you live in one of these states, you’ll still be able to enroll in another state’s ABLE program.
Benefits
The main benefit of ABLE accounts is that they allow disabled people to save money, while not jeopardizing their eligibility for federal benefit programs. These programs typically have limits on how much you can have in assets. ABLE accounts allow disabled Americans to circumvent these limits and build up savings over time.
Key rules and regulations for ABLE accounts
ABLE accounts are governed by IRS rules, and you’ll need to adhere to these strictly in order to use the funds you save in your account.
Qualified disability expenses
ABLE account owners can withdraw money from their accounts for any qualified disability expense. This covers a broad range of expenses related to things like education, health, transportation, and housing.
So does that include a down payment for a home purchase?
“The answer to that is yes,” says Miranda Kennedy, director of the ABLE National Resource Center. “The purchase of a home, payments for rent, and other housing-related expenses are all qualified disability expenses.”
Contribution limits
In 2024, your family, friends, or other third parties can contribute up to a total of $18,000 to your ABLE account for the year (equal to the annual gift tax exemption). If you work, you can also contribute up to $14,580 of your earnings this year (or more if you work in Hawaii or Alaska).
Impact on benefits
Funds in an ABLE account don’t count toward asset limits for programs like SSI or Medicaid. SSI, for example, doesn’t let recipients have more than $2,000 in assets ($3,000 for couples). But with an ABLE account, these individuals can save much more than that and still qualify for federal benefits.
Can you use ABLE funds to buy a house?
An ABLE account can make homeownership possible for disabled individuals, even those receiving means-tested benefits. Here’s what to know about using ABLE funds to buy a home.
Current regulations
Current regulations allow you to keep up to $100,000 in your ABLE account without it impacting your SSI eligibility. These funds can go a long way in helping you afford a home purchase, while not jeopardizing your benefits in the process.
Qualified expenses for homeownership
One of the more popular uses of an ABLE account for hopeful homeowners is saving for a down payment. Conventional mortgages allow down payments as low as 3%, but with current home prices that can amount to thousands or even tens of thousands of dollars.
You can also use funds in an ABLE account for closing costs, an earnest money deposit, insurance premiums, and for making your monthly mortgage payments after closing.
Restrictions
ABLE account funds can only be used on qualified disability expenses or expenses that are necessary to maintain your health, independence, and quality of life. This means you can’t dip into your account to pay for a trip to Disney World or another unnecessary expenditure.
You also can’t use ABLE funds to replace services being provided through other benefit programs (you can use them to supplement those benefits, though).
Alternatives and workarounds
If you don’t have enough saved in your ABLE account to buy a home just yet, you have options. These include:
Using ABLE funds for home modifications
You can also use ABLE funds to make your existing home more accessible. For example, you might use your funds to install a wheelchair ramp or widen the doorways. As these are expenses related to your disability, they should qualify.
Combining funds
You might consider combining your ABLE funds with other sources of money, if possible. For instance, using ABLE funds, plus a gift from a family member, may be enough to cover a down payment and closing costs. You can also combine it with down payment assistance programs or other local offerings.
Loans and grants
There are many disability loans and grants out there that can help you buy a home. These vary by location, so start by asking your local housing department or your loan officer. They can point you toward potential options in your area.
Case studies and examples
Cheryl Walfall-Flagg, an ambassador for the ABLE NRC, first learned about these accounts at a workshop she attended several years ago. She had never heard of them before, and she was interested in opening one for her son, who she knew would one day need SSI.
Walfall-Flagg’s son Sean, 21, and nephew Davante, 16, are on the autism spectrum. Today, both have ABLE accounts to save for their futures, including for homeownership. Walfall-Flagg and her husband are the legal guardians of Davante.
“I’m trying to teach them how to be on their own because number one, I won’t always be here,” Walfall-Flagg says. “And number two, the family members that we have, not everyone is always gonna be here. So they need to be able to have as much independence as possible and the ability to be secure and live their life to the fullest.”
Tim Elliot, another ABLE account owner and ABLE NRC ambassador, found out about these accounts through an internet search. He was looking for programs that could help people with disabilities.
Elliot became paralyzed from the shoulders down as a result of spinal meningitis when he was in the Navy in 1991. He was able to get some movement back shortly after his illness, but he still uses a motorized wheelchair.
“Most of the time people with disabilities are poor because unfortunately, SSI — it’s a good thing to have, but it’s not meant to help you live the lifestyle that everyone else is living,” Elliot says. “It’s just there to give you the bare minimum so you’re not really getting ahead.”
He opened his account on the first day that New York made ABLE accounts available in the state. He uses the account as emergency savings and to save for a condo, which he hopes to be able to purchase next year.
Tim says he wants the independence that comes with owning your own home.
“I want a better quality of life, not just the building or apartment that I live in or the house I live in, but the surrounding areas,” he says. “I want something that when I go outside, it’d be nice to look at.”
Kennedy, the ABLE NRC director, says that having stable housing through homeownership can have far-reaching benefits for people who have disabilities.
She says one ABLE NRC ambassador who used his account to purchase a home was previously homeless for two decades. Having a home helped him get more stable employment and improved his health.
“There’s that trickle effect between, ‘now I am someone who is a homeowner and I can invest in myself, I can grow my assets, I can have stable housing, and I can stabilize other things,’ including health, employment, your connections in a community, your sense of community,” she says.
Resources
If you need more information on ABLE accounts or how to put them toward homeownership, there are many resources to explore.
These include:
You can also consult a tax professional or attorney in your area. They can help you determine the best way to use your ABLE account funds toward your goals.