Aging in Place and Senior Housing Resources
According to the nonprofit Population Reference Bureau, the number of adults in America over the age of 65 is expected to increase from roughly 52 million in 2018 to over 95 million by 2060. This near doubling of the senior population represents a projected increase from around 16 percent to 23 percent of all Americans.
With such a rapid expansion of this demographic, senior housing has become a more critical resource than ever. From funding options to senior communities to aging in place, there is a lot that seniors need to know about housing as they move into the next phase of life.
What Is Meant by Aging in Place?
The Centers for Disease Control and Prevention defines aging in place as the “ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.” And while this definition paints the concept in broad strokes, aging in place can take many different forms.
For some older adults it could mean staying in the same home they’ve lived in for decades. For others it could mean entering a senior living community with resources to provide a continuum of care through the rest of their life.
At its core, the concept of aging in place means that senior housing goes beyond functional needs and helps older adults thrive through autonomy and a sense of community.
Why Is Aging in Place Important?
As America’s senior population grows, so will the demand for senior resources.
The United States already has a robust industry to support senior living with nearly 29,000 assisted living facilities nationwide. And while senior housing options, including retirement homes, nursing homes, assisted living and independent living communities work for many seniors, they’re not perfect for everyone.
Aging in place can be an excellent option for older adults who may not have access to other housing options or would simply feel more comfortable in their own home.
A 2010 study found that one-third of seniors living outside of nursing homes and hospitals lived alone. These figures also increased by age, with nearly half of all women over 75 living alone. As these numbers continue to grow, aging in place could also be a necessary option to prevent shortages in all forms of senior housing.
Choosing the right housing option can be a major challenge for some adults moving into the senior ranks. The first step towards finding a successful senior housing solution is understanding the living options available for seniors.
Living at Home
Remaining in a current home is an inviting proposition for many older adults. With some added support, living at home can be a great way for seniors to age in place with comfort, familiarity and convenience.
One option that makes living at home possible for some seniors is home care. This is a flexible option in which care providers bring their services into a senior’s home. Virtually all the support services offered by residential communities are available through home care providers, and 24-hour nursing care is usually available.
There are two main forms of home care that seniors may consider when living at home. The first offers non-medical support, such as housekeeping, transportation, meal prep and delivery, home maintenance, companionship and help with activities of daily living. These services are typically not covered by insurance, but seniors may be able to secure some funding for non-medical in-home support through Medicare.
The other main form of in-home support involves help from licensed medical practitioners, including nurses and physicians. This form of in-home care could include help with medication, wound care, 24/7 attendance, health monitoring, pain management and other medical needs.
These services are more often covered by Medicare and private insurance providers. It’s also common to have a blend of the two forms of in-home care, so some non-medical services could be tied in with approved insurance coverage.
The costs of in-home health care can vary drastically from senior to senior, but the national average from homemaker services is $4,290 per month and home health aides is $4,3852 monthly.1
Location is one of the main determinants of cost when it comes to in-home care.2 Seniors living in major cities can expect to pay significantly more than those less populous areas, but other factors, such as a care giver's pay structure, can also have an impact.
Many in-home care providers charge by the hour, so those requiring 24/7 care can expect much higher monthly averages.
For many seniors, retirement communities are an ideal way to connect with peers and give up the stresses of home maintenance. These communities can offer freedom and flexibility with a mix of senior-oriented health and recreational options close at hand. Retirement communities can take a lot of shapes, from independent living to continuing care communities3 that allow seniors to age in place even as their care needs evolve.
As with home care services, age-restricted retirement communities can have a wide range of costs. Depending on the location, amenities and services, retirement communities can cost anywhere from $1,000 to over $10,000 a month.4 Many also have an upfront membership cost on top of the home price.5
With such high potential costs, it’s critical that seniors make an informed choice when moving into a retirement community.
Here are a few of the key factors that can help determine if these communities are a good fit:
Everybody knows location is important in the real estate market, and that’s especially true when selecting a retirement community. Be sure to visit the location and spend some time in the area before committing. Cultural and environmental differences may seem appealing as an outsider, but it’s best to be certain they will compliment your daily lifestyle.
Joining a retirement community is a big commitment, and it’s important to know that your new home has a solid financial foundation. Carefully review any financial information that’s available from a prospective community and inquire about projected changes in membership and homeowner fees.
Retirement can offer opportunities to build new friendships and connect with your community. Make sure to spend some time in and around a prospective retirement community and meet as many people as possible. These are the people that could be your friends and support system through later life.
Assisted Living and Nursing Homes
Assisted living facilities and nursing homes can be a good choice for seniors who require a higher level of daily care. As with the other forms of senior housing, there are many types of assisted living facilities and nursing homes, and both can provide a wide range of care, from very minimal to highly specialized.
Assisted living communities6 typically provide a supervised environment with support for activities of daily living, housekeeping and minor medical needs, such as medication management and wellness checks.
Nursing homes, on the other hand, offer a higher level of both medical and personal care with 24-hour support for those with chronic health conditions.
Choosing the right facility and appropriate level of care can be challenging, but there are a few factors that can help narrow down the options. These can include current care needs, projected care needs in the future, location, community culture and price.7 If, for example, a senior has recently been diagnosed with Alzheimer’s, then it could be critical to choose a facility with increasing levels of memory care. Finding a community that caters to specific cultural aspects, such as religious and ethnic affiliations, may also help seniors make a decision.
Both types of facilities can come with a hefty price tag, but there are many funding options available to seniors to help cover the costs.
For those requiring short-term care or rehabilitation in assisted living or a nursing home, Medicare8 may cover a portion or all of the cost. Medicare does not, however, cover long-term and permanent moves into these facilities. In those cases, seniors may be able to tap into long-term care insurance policies or access Medicaid funding, depending on their financial situation.
Veterans and those with VA benefits may also be able to cover or defray costs with Aid and Attendance pension funds. In addition to insurance, Medicaid and VA benefits, there are many financial vehicles available to seniors through the banking industry that could help cover long-term care costs.
Mortgages, Loans and Insurance
Planning for and keeping up with housing costs can be a challenge for some seniors as they retire from the workforce and move onto a fixed income. Working with lenders can be a good way to fund an initial move into senior housing and sustain a comfortable lifestyle that includes aging in place.
From reverse mortgages to housing cost assistance programs, the financial and insurance industries offer a range of products and services that can help pay for senior housing.
Seniors who own a home may be able to use a portion of the equity in their home to fund changes in their housing or care needs. With a reverse mortgage, a borrower can obtain either a line of credit or a lump sum payment based on the current value of their home equity.9
These funds typically don’t have to be repaid until the borrower sells the home, moves or dies, and they can be a viable income source for older adults who need extra cash and have their home paid off.
There are three basic types of reverse mortgages available in the United States.
- The first and most common is called a home equity conversion mortgage (HECM). These are backed by the U. S. Department of Housing and Urban Development (HUD) and require the borrower to meet with a lending counselor before closing on the loan.
Funding from HECMs can be used for any purpose and can be paid out as a lump sum, line of credit, term loan or tenured loan based on occupancy in the home.
- Single-purpose reverse mortgages offer funding that must be used for a specific reason, such as in-home care and other medical costs. The purpose is agreed upon with the lender and specified in the terms and conditions of the loan.
The origination and closing costs with single-purpose reverse mortgages can be lower than HECMs, so they could be a good option for borrowers who want to save some money and need less flexibility.
- The third option is a proprietary reverse mortgage. This type of loan is backed by the issuing lender and is based largely on the value of your home. It can be hard to qualify for a proprietary reverse mortgage, but more money is usually available on high-value properties with these loans.
Seniors with a valuable home and very low mortgage or no mortgage may find this type of reverse mortgage especially appealing.
Reverse mortgages can be very complicated, and that’s why HUD requires potential borrowers to go through counseling before closing on the loan. With that said, they offer some significant upsides that can help seniors leverage what they already have.
Pros and cons of reverse mortgages
Here are few pros and cons to explore when considering a reverse mortgage:
- Unlike 401k disbursements, payments from a reverse mortgage are usually tax-free.10
- Borrowers may remain in and retain title over the home throughout the loan’s term.
- In some cases, spouses may continue living in the home even after the borrower has died.
- With HECMs, the amount owed usually cannot exceed the value of the house. In these cases only 95% of the home’s value must be repaid.
- Since a reverse mortgage is based on equity and must be repaid upon the borrower’s passing, there can be fewer assets available to pass on as inheritance.
- Interest on reverse mortgages usually grows over time and can significantly increase the overall loan cost. These interests rates can also change over the term of the loan.
- The costs associated with reverse mortgages, including origination fees and closing costs, can be higher than other loans.
- Borrowers maintain the financial burden for property taxes, homeowners insurance, maintenance and upkeep costs.
- Choosing a reverse mortgage from a trustworthy lender can be confusing.
When shopping for a reverse mortgage, the first step is to study up on the general process and terminology associated with these loans. While counseling sessions are only required for HECMs, it may be worth seeking professional advice about the process for any reverse mortgage.
Be aware that sales representatives from reverse mortgage lenders or other service providers may give incomplete or deceiving information about reverse mortgages. Any suggestion that a reverse mortgage must be coupled with other services, such as home improvement or senior care, is false.
Home loans, including traditional mortgages, may also be available to those considering a move into senior housing. The idea of taking on a long-term mortgage later in life may be counterintuitive, but it could be a better option than paying cash in some circumstances.
Unlike a cash payment, portions of a mortgage may be tax deductible, allowing seniors to reap greater rewards from savings and investments11. Interest rates on home loans have also been low since the 2008 financial crisis, making them even more appealing for seniors.
Applying for a home loan later in life does, however, have complexities. Since many seniors live on a combination of income streams, many lenders require a more stringent application process for seniors. When applying for a home loan later in life, expect to fill out more paperwork and submit more financial documentation than you did for previous mortgages and home loans.
Despite these challenges, home loans can be a viable funding source for older Americans. In fact, a 2013 survey from the Federal Reserve found an 18.5% increase in seniors taking on new debt from the decade before.12
While homeowners insurance can’t help seniors pay for housing expenses, it can help protect their investment and shield against liability.
When making a move into any senior housing option, it’s important to carefully review homeowners insurance policies to ensure that the coverage is appropriate. Homeowners insurance premiums can change for a host of reasons, including renovations, additions, changes to building codes, buying a smaller home and moving into a rental.13
All of these variables could come into play for seniors, so it’s best to schedule an appointment with your homeowner’s insurance provider and discuss all the options when considering a move.
Housing Cost Assistance for Seniors
According to a recent study from HUD, the number of American seniors who spent more than 50% of their income on housing increased from 1.5 to 1.9 million between 2013 and 2015.14 With the population of older adults growing rapidly, this number is likely to expand in the coming decades.
In fact, data released as part of a recent Harvard study found that 40% or more of homes with seniors in the Los Angeles, New York City and Miami areas reported feeling burdened by housing costs.15 Fortunately, there are a number of government and nonprofit resources for seniors who may need assistance meeting the high costs of senior housing.
Section 8 and Section 202
The federal government is one of the key providers of housing cost assistance for American seniors.
When the Government Accountability Office did a complete review of federal senior housing programs16, they found that there were a total of 23 programs17 spread across multiple agencies. These funding sources are primarily managed by HUD and the USDA and both offer programs specifically focused on seniors. Additional programs are also targeted for seniors with disabilities.
Two of the primary housing cost assistance programs available to seniors are section 202 and section 8. Both are administered through HUD and can provide continuing financial support for low-income seniors for safe and supportive housing.
There are, however, differences in eligibility and administration of funds for each program. Here’s an overview of Section 202 and Section 8 housing support as they apply to seniors:
This program is a funding source to help create and sustain new affordable housing communities for low-income seniors18.
Money provided through Section 202 comes in the form of interest-free capital grants to private, nonprofit organizations for use expressly in the creation of affordable senior housing. This funding does not have to be repaid by the recipients as long as their senior living community is open and actively serving a community for at least 40 years.
Additionally, Section 202 provides rental assistance to help cover any tenants who are struggling to pay rent.
This two-tiered project strives to not only address affordability challenges for individual seniors, but also to expand affordable senior housing options in communities of need.
Section 202 funding is limited to private, nonprofit organizations that meet the requirements specified in HUD’s Notification of Funding Available19. To receive funding, organizations must also be able to contribute at least 0.5% of the capital advanced by HUD.20
Section 202 housing is available to seniors who are at least 62 and have a household income no greater than 50% of the area’s median income.21 Houses with just one member of 62 or older may also qualify for Section 202 housing as long as the income requirements are met.
To apply for Section 202 housing, seniors should contact their local public housing authority to confirm eligibility. Demand for this subsidized housing is very limited, especially in big cities, so qualifying seniors should immediately join the waiting list for each Section 202 home in their area.
For more information and assistance, both nonprofits and low-income seniors can explore HUD’s Section 202 portal on the web.22 There, users can find overviews about the program, detailed documents about the application process and who to contact at HUD for help. Various senior advocacy groups, such as the National Housing Law Project23, also provide support and guidance for parties hoping to secure Section 202 funding.
The Section 8 program, also known as the Housing Choice Voucher program, supplies funding for very low-income families and individuals to rent or buy a home.24
Unlike the rental assistance element of Section 202, the funds available through Section 8 are paid directly to recipients. This provides increased flexibility by allowing individuals and families to seek and obtain any housing that accepts Section 8 vouchers.
HUD provides the funding for Section 8, but the program is administered at the municipal level by public housing authorities (PHAs). Local PHAs serve as hubs for the Section 8 program and calculate the maximum amount of funding available to applicants.
This subsidy may vary depending on an applicant's needs as well as the region’s median income level and housing costs.
Another difference with Section 202 is that Section 8 is not restricted to seniors. Very low-income families and individuals with disabilities may also qualify for Section 8 housing vouchers.
Eligibility for the program is determined by the PHA in each region and based on total annual gross income and family size.25 Section 8 vouchers are, however, limited to American citizens and those who fall into a few specific categories of qualifying non-citizens.
Seniors interested in Section 8 vouchers can apply through their local PHA.26 Like Section 202 housing, demand often far outpaces supply for Section 8-approved housing.
Applicants should move quickly to join the waiting lists for any homes in their area for which they may qualify. In some regions, PHAs are likely to prioritize some applicants based on need. Those may include homeless applicants, those paying more than 50% of their income in rent and those who have been involuntarily displaced.
HUD's official website is a good starting place for information and assistance regarding Section 8 funding. Seniors can view a database27 of profiles for PHAs nationwide with up-to-date contact information and additional resources.
Additional Section 8 help may be available by contacting HUD’s Department of Public and Indian Housing customer service center.28
Senior Housing Nonprofits
In addition to federal housing assistance programs, there are several nationwide nonprofit organizations with programs dedicated to senior housing.
A range of senior housing services are available through nonprofit organizations, including subsidized senior living facilities and low or no-cost home repairs to enable aging in place.
Habitat for Humanity
Best known for its community approach to building and improving homes for low-income families, Habitat for Humanity also offers senior-specific services.
The group’s dedicated aging in place initiative, Housing Plus29, brings together professional contractors and volunteers to update and improve seniors’ homes. As part of this program, Habitat for Humanity officials conduct a property survey and interview homeowners about their unique needs and preferences for aging in place.
Local human services representatives are also involved to ensure that all home improvements are up to local codes and follow regional best practices. Once these assessments are complete, Habitat professionals and community members take on projects such as bathroom updates, widening hallways, installing wheelchair ramps and updating floors.
Like Habitat for Humanity, Building Together serves seniors by improving homes to allow for aging in place. This group similarly relies on partnerships between volunteers, skilled trade workers and corporate partners and has chapters nationwide.
Roughly two-thirds of Building Together’s 10,000 annual projects benefit seniors and are specifically focused on aging in place.30
In a survey of their impact on senior communities between 2014 and 2017, Building Together found completed renovations allowed nine out of every 10 senior homeowners to live at home for at least another decade. Eight in ten homeowners also reported that their renovations prevented a chronic condition from getting worse.
Volunteers of America
Volunteers for American (VOA) is a faith-based non-profit organization with a focus on affordable housing and health services for low-income families, seniors and those with disabilities. This group was founded in 1896 and currently has 32 affiliate groups in 46 states plus Puerto Rico and Washington, D.C.31
VOA owns and operates 20 senior living facilities in seven states across the country. These facilities, called VOA Senior Living centers, offer a competitive range of senior living services, including memory care, assisted living, independent living, adult day care, respite stays and skilled nursing.32
While VOA relies on over 16,000 professional staff to operate their senior communities and ministries, the group also benefits from roughly 65,000 volunteers nationwide.33