Can a Nursing Home Take Your House in Texas? Medicaid Rules

Short answer

A nursing home does not take title to your house. The real questions are about Medicaid: whether the home counts while you get care, and whether HHSC can seek repayment from your estate after death. Texas can exclude the home from eligibility counts, and HHSC lists set exemptions from estate recovery.

Families usually ask this question when a parent needs long-term care and the house is the main thing they own. The plain answer: a nursing home does not take your house. What matters is Medicaid, which looks at the home in two ways. While you are alive, it decides whether the house counts against eligibility. After death, the state can seek repayment from the estate. This guide covers the statewide rules. For local counseling offices, appraisal lookups and probate courts in Dallas, Tarrant, Collin and Denton counties, see our DFW guide to nursing home care and your house.

While you are alive: the home is often excluded

The Texas HHSC handbook for Medicaid for the Elderly and People with Disabilities (MEPD) treats the home differently from cash or other real estate. Section F-3100 lists the main ways the home stays excluded when you move into a facility:

You plan to return. Under F-3120, the home can stay excluded when you no longer live there but intend to go back. The main proof is a signed Form H1245, Statement of Intent to Return Home, or a similar written statement.
Your spouse or a dependent relative lives there. Under F-3112, if you live in a long-term care facility and your spouse or a dependent relative lives in your principal residence, the home is not considered an available resource. A dependent relative is someone who lived in the home before you left and cannot support themselves outside it for medical, social or other reasons.

There is a cap. Section F-3600 sets a home equity limit of $752,000 starting January 1, 2026. Equity above that can affect eligibility. The cap does not apply when your spouse lives in the home, or your child does and is under 21, blind, or permanently and totally disabled. The handbook also says a reverse mortgage or home equity loan can be used to lower your equity. That money is not counted in the month you receive it but does count the next month.

Giving the house away: the 60-month look-back

Some families think about deeding the house to a child before applying. Medicaid checks for that. Section I-1200 says that when a transfer for less than fair market value is found, Medicaid must withhold payment for nursing facility care and certain other long-term care services for a penalty period. Section I-2100 sets the look-back at 60 months, counted from the later of entering the facility or applying for Medicaid. A sale to a relative at a deep discount can count too. Our guide on selling a house to your child below market value explains how that discount is treated.

Section I-3100 lists transfers of the home that do not cause a penalty:

Who receives the home	Condition in I-3100
Spouse	Lives in the home
Child	Under 21, or disabled under Social Security disability criteria
Sibling	Has an equity interest and lived there at least one year before the person entered the facility
Son or daughter	Lived there at least two years before the person entered the facility and gave care that kept the person out of one
Children, siblings and others	By an enhanced life estate deed or transfer on death deed approved by the regional attorney, with a signed statement that the person intends to return home

Selling the house while on Medicaid

Section F-3130 says real property, including a home, is exempt while it is placed for sale, and the exemption lasts until the sale proceeds are available to the person. Once the money arrives, it is no longer a house. It is cash, and the handbook's exemption has ended. If the money is used to buy a replacement home, F-3130 says the proceeds are not counted for three full months after the month they are received. Because a sale can change eligibility, talk to an elder-law attorney or a benefits counselor at your Area Agency on Aging before you list the house.

After death: the Medicaid Estate Recovery Program

Government Code Sec. 546.0403 directs HHSC to carry out the federal estate recovery requirement in 42 U.S.C. 1396p(b)(1). Texas runs it as the Medicaid Estate Recovery Program, or MERP. HHSC's guide says it affects only long-term care services and supports received after age 55, and only if those services began after March 1, 2005. Covered services include nursing facility care, intermediate care facilities for people with intellectual disabilities, and waiver programs such as HCS, CLASS, CBA and STAR+PLUS.

Key points from HHSC's guide and FAQ:

No liens. The FAQ says MERP does not place liens on assets before or after a recipient's death.
Probate estate only. The claim reaches property that passes through probate. Assets that pass directly outside probate are not part of the probate estate.
Notice. HHSC sends a Notice of Intent to File a Claim within 30 days of learning of the death.
Not your own pocket. HHSC says family members are not required to pay the claim out of pocket.

The FAQ is blunt: "The state cannot take your property." It also says heirs can pay the claim with other funds if they do not want to sell the home. So the house is not seized, but a valid claim is still a debt of the estate. In the estate's list of debts, Estates Code Sec. 355.102(h) makes a Medicaid repayment claim Class 7. Funeral and last-illness costs (Class 1) and secured debts such as a mortgage or tax lien (Class 3) come first.

New administrator: HHSC's guide says Texas MERP operations transition to Stellarware Corporation effective Sept. 1, 2026. The toll-free number listed is 800-641-9356.

When HHSC will not seek repayment

HHSC's guide lists situations where the state will not file a claim:

a surviving spouse;
a surviving child under 21;
a surviving child of any age who is blind or permanently and totally disabled under Social Security requirements;
an estate worth $15,000 or less;
Medicaid costs of $5,000 or less;
an unmarried adult child who lived in the home full-time for at least one year before the death;
a property that would cost more to sell than it is worth.

Undue hardship and the $150,000 homestead test

Heirs can also ask HHSC to waive the claim for undue hardship. HHSC's guide says that if the homestead is worth less than $150,000 and one or more heirs have family income under a set amount, the state may not ask for repayment. The heirs must make the request and prove it.

The details are in Texas Administrative Code Title 1, Chapter 373, published as proposed rules in the Texas Register on March 20, 2026 and adopted effective August 27, 2026:

Deadline. A hardship request must be made within 60 calendar days of the date on the Notice of Intent to File a Claim (Sec. 373.209).
Home value. The value used is the appraisal district value for the most recent tax year at the time of death. If it is over $150,000, only the first $150,000 is exempt.
Income. Each sibling or direct descendant inheriting the homestead must have gross family income below 300 percent of the federal poverty threshold, with no deductions.
Review. After a denial, MERP must receive a request for review within 60 calendar days (Sec. 373.211).

The HHSC form is Form 5006, Application for Hardship Waiver. Mark the 60-day date the day the notice arrives.

Transfer on death deeds and estate recovery

A Texas transfer on death deed passes the house at death without probate. Estates Code Sec. 114.106(b) says property passing this way is not property of the probate estate for any purpose, and it names Government Code Sec. 546.0403, the estate recovery law. But Sec. 114.106(a) lets a personal representative reach that property for claims when the estate itself cannot pay them. How those two parts work together for a Medicaid claim is a question for an elder-law attorney. Also note that for the transfer penalty, I-3100 treats a transfer on death deed as an exception only when the regional attorney has approved it.

Get the right advice before you act

This page summarizes HHSC policy and Texas statutes. It is not legal or tax advice. Medicaid planning turns on facts like marital status, who lives in the home and when care began. A Texas elder-law attorney can review your situation. If the house is being sold, a CPA can explain the tax side. If a parent has already died, our guide to selling inherited property in Texas covers the probate step.

Selling a parent's house to Cash Home Advisors

Once a family decides to sell, whether to pay for care, settle an estate or answer a MERP claim, timing can matter. Cash Home Advisors is based in Fort Worth. We can close in 7–14 days and we pay all closing costs. You see the closing statement before you sign, so every payoff and claim on the house is visible.

Read our page on selling an inherited house in Texas, see how our process works, or request a cash offer. More guides are in our inherited property category.

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We buy Texas houses as-is, pay all closing costs, and can close in 7–14 days.

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Frequently asked questions

Does Texas Medicaid put a lien on my house?

No. HHSC's estate recovery FAQ says the program does not place liens on assets before or after the death of a Medicaid recipient. Any claim is filed against the probate estate after death.

Will my children have to pay back my Medicaid costs?

HHSC says family members are not required to pay from their own pockets. The claim is against the estate. Heirs may choose to pay it with other money if they want to keep the house rather than sell it.

Can I give my house to my kids so I qualify for Medicaid?

A gift or below-value sale within the 60-month look-back can lead to a penalty period during which Medicaid withholds payment for nursing facility care. The HHSC handbook (I-3100) lists exceptions, such as a transfer to a spouse who lives in the home or to a child under 21 or a disabled child. Talk to an elder-law attorney before deeding the house.

What is the Texas Medicaid home equity limit in 2026?

The HHSC handbook (F-3600) lists $752,000 from January 1, 2026. The limit does not apply when a spouse, or a child who is under 21 or blind or permanently and totally disabled, lawfully lives in the home.

Sources

General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.