Introduction
While one’s home is generally exempt from Medicaid’s asset limit, for single long-term care Medicaid applicants, there is a home equity interest limit for home exemption. Unfortunately, if one is over the limit in their state, their home is not always exempt from Medicaid’s asset limit. In other words, their home equity value might be calculated as a countable asset. But how does Medicaid assess and verify one’s home equity? How often do they do it? And what about current Medicaid beneficiaries? Does Medicaid monitor their home equity? Can an increasing home equity result in the loss of Medicaid benefits?
Definitions: Home Equity Value & Home Equity Interest
Home Equity / Home Equity Value
Home equity, also called equity value, is the current market value (CMV) / fair market value (FMV) of one’s home, which is based on the amount for which similar houses have recently sold in the same geographic area, minus any home debt. State Medicaid agencies often call this debt “encumbrances” and includes mortgages, reverse mortgages, home equity loans, and liens against the home. Essentially home equity is the portion of the home one owns. Home equity value is the dollar amount of one’s home equity. As an example, if the CMV of one’s home is $700,000 and they still have a mortgage for $400,000, their home equity value is $300,000 ($700,000 – $400,000 = $300,000). As one continues to pay their mortgage (and current market value does not decrease), the amount of their home equity increases.
Home Equity Interest
Home equity interest is the amount of home equity that an individual owns. For instance, if one is the sole owner of their home, their home equity interest is 100% of the home’s equity value. Using the example above where the home equity value is $300,000, the homeowner’s home equity interest is $300,000. Now say one co-owns their home with their cousin, with each of them having equal shares. If the home equity value is $300,000, each of them have a home equity interest of $150,000.
Medicaid’s Asset Limit & the Primary Home
To be eligible for long-term care Medicaid, there are functional and financial eligibility requirements. Relevant to the home equity interest limit, is Medicaid’s asset limit and the treatment of one’s primary home. Generally, one’s home is exempt from Medicaid’s asset limit. However, there are home exemption rules, and if not met, one’s home is counted towards the asset limit (which is often just $2,000). See state-specific asset limits.
One of these home exemption rules is specific to single (unmarried) applicants who have no child under 21 years, or a child of any age that is blind or permanently disabled, living in the home. This is a home equity interest limit, sometimes called a substantial home equity limit. In 2025, all states but two, set their home equity interest limit at either $730,000 or $1,097,000. When the limit applies, and a Medicaid applicant (or beneficiary) has a home equity interest over their state’s limit, their home is generally counted towards Medicaid’s asset limit. More commonly than not, this puts one over Medicaid’s asset limit, and as a result, they are ineligible for long-term care Medicaid. To be clear, the home equity interest limit does not apply to Regular Medicaid
State-Specific Home Equity Interest Limits
| 2025 Home Equity Interest Limits for Medicaid Long-Term Care Eligibility Purposes | |
| State | Equity Interest Limit |
| Alabama | $1,097,000 |
| Alaska | $730,000 |
| Arizona | $730,000 |
| Arkansas | $730,000 |
| California | No limit |
| Colorado | $1,097,000 |
| Connecticut | $1,097,000 |
| Delaware | $730,000 |
| Florida | $730,000 |
| Georgia | $730,000 |
| Hawaii | $1,097,000 |
| Idaho | $750,000 |
| Illinois | $730,000 |
| Indiana | $730,000 |
| Iowa | $730,000 |
| Kansas | $730,000 |
| Kentucky | $730,000 |
| Louisiana | $730,000 |
| Maine | $1,097,000 |
| Maryland | $730,000 |
| Massachusetts | $1,097,000 |
| Michigan | $730,000 |
| Minnesota | $730,000 |
| Mississippi | $730,000 |
| Missouri | $730,000 |
| Montana | $730,000 |
| Nebraska | $730,000 |
| Nevada | $730,000 |
| New Hampshire | $730,000 |
| New Jersey | $1,097,000 |
| New Mexico | $730,000 |
| New York | $1,097,000 |
| North Carolina | $730,000 |
| North Dakota | $730,000 |
| Ohio | $730,000 |
| Oklahoma | $730,000 |
| Oregon | $730,000 |
| Pennsylvania | $730,000 |
| Rhode Island | $730,000 |
| South Carolina | $730,000 |
| South Dakota | $730,000 |
| Tennessee | $730,000 |
| Texas | $730,000 |
| Utah | $730,000 |
| Vermont | $730,000 |
| Virginia | $730,000 |
| Washington | $1,097,000 |
| Washington D.C. | $1,097,000 |
| West Virginia | $730,000 |
| Wisconsin | $750,000 |
| Wyoming | $730,000 |
When & How Medicaid Assesses & Verifies Home Equity
Generally, home equity is assessed by a Medicaid caseworker at the time of long-term care Medicaid application and again at each annual renewal (redetermination). This is because one’s home can be under the home equity interest limit at the time of Medicaid determination, but can later be over the limit due to increasing market value or continuing mortgage payments. If one’s home equity value is near the home equity interest limit in their state, the Medicaid agency might monitor its value more frequently.
The way a state verifies one’s home equity value varies based on the state. Some states may accept an applicant’s / beneficiary’s statement regarding the amount of their home equity (if not questionable). Generally, however, there must be proof of the home’s fair market value (i.e., recent property tax statement, statement from a real estate agent) and the amount of any debt against the home (i.e., recent copy of mortgage statement, copy of loan agreement). Recall that to calculate a home’s equity value, debt against the home is subtracted from the home’s fair market value. A few state-specific examples of how home equity is determined and verified follows.
1) New York uses an electronic asset verification system to check the fair market value of one’s home. If the value is under the state’s home equity limit, the home is exempt and the applicant / beneficiary is not required to provide any documentation. If the equity value exceeds the limit, and the asset verification system does not show a current mortgage balance, documentation showing one’s outstanding loan balance is requested to determine the value of one’s home equity interest.
2) North Carolina obtains a home’s current market value by using the tax value found on county tax office records. Persons over 65 years old may qualify for a deduction from their property taxes, and if this is the case, Medicaid considers the current market value to be the tax assessed value prior to any deduction. If one’s equity value is over the limit, proof of “encumbrances” (i.e., hospital / nursing home lien, bank mortgage / lien) is required. The Medicaid applicant / beneficiary must provide a written statement (signed and dated) verifying the debt, or alternatively, they must provide necessary information for it to be verified (i.e., creditor, loan number).
3) Wisconsin determines the fair market value of one’s home by utilizing property tax assessments, given the Medicaid agency and Medicaid applicant / beneficiary agree that the value is representative of what the home would sell for on the open market in the area in which the home is located. If they are not in agreement, a statement (or multiple) from realtors can be obtained. State policy indicates that any debt against the home (i.e., mortgage, reverse mortgage, home equity loan) is subtracted from the home’s fair market value to determine equity value, but does not indicate exact documentation that must be provided.
Remember, if there are multiple homeowners, the caseworker must calculate the value of one’s home equity interest, and then compare this figure to the state’s home equity interest limit. For spouses, the state may consider them as one owner, as does Delaware.
Options When Exceeding Home Equity Interest Limit
If the home equity interest limit applies, and one is over the limit, they can be denied long-term care Medicaid eligibility or they can lose their existing long-term care benefits. However, there are ways through which one can lower their home equity, thereby reducing their home equity interest. While these strategies might not be permitted in all states, options include taking out a reverse mortgage or a home equity loan. These options might also be applicable when one is near their state’s home equity interest limit. Furthermore, some states allow one to request an undue hardship waiver if denial / loss of long-term care benefits would deprive them of medical care (causing their life or health to be endangered), food, clothing, shelter, or other necessities of life. Being granted an undue hardship waiver means the home equity interest limit does not apply to that individual. Persons over, or near, the home equity interest limit should consult with a Certified Medicaid Planner to discuss their options. More on what to do if one is over the home equity interest limit.