Home Equity Limit for Medicaid in Delaware: The $752,000 Cap Explained
Delaware uses the lowest home equity limit the federal government allows: $752,000 for 2026. If your parent's equity interest in their primary home exceeds that amount, the home becomes a countable asset and can disqualify them from long-term care Medicaid.
For most Delaware families, this cap isn't a problem. But in parts of New Castle County and coastal Sussex County, rising property values have pushed some homes close to or past this threshold — catching families off guard.
How the Equity Limit Works
The $752,000 figure applies to the applicant's equity interest in the home, not the home's market value. Equity is market value minus outstanding mortgage balance and any liens. A home worth $900,000 with a $200,000 mortgage has $700,000 in equity — below the cap.
If your parent's home equity is at or below $752,000 and they express an intent to return home, the property is exempt from countable assets. It doesn't matter whether the return is realistic — a nursing home resident with advanced dementia can still qualify for the exemption if the intent to return is documented in the Medicaid application.
When the Cap Doesn't Apply
The $752,000 equity limit is completely waived in three situations:
A spouse lives in the home. If the community spouse resides in the primary residence, the home is exempt regardless of equity value. A $2 million home with the healthy spouse living in it does not affect the applicant's Medicaid eligibility.
A minor child lives in the home. Same protection. The home is fully exempt if a child under 21 resides there.
A blind or permanently disabled child lives in the home. Again, no equity cap applies.
These waivers mean the $752,000 limit primarily affects unmarried applicants — widowed or single individuals with no qualifying family member in the home.
What Happens If Equity Exceeds the Limit
If your parent is single and the home equity exceeds $752,000, DMMA treats the home as a countable asset. This effectively disqualifies the applicant until equity is reduced to $752,000 or less.
Options to bring equity below the threshold:
Take out a mortgage or home equity loan. Borrowing against the home increases the debt and reduces equity. A home worth $850,000 with a new $150,000 home equity line has $700,000 in equity — under the cap. The borrowed funds become countable cash, which then needs to be spent down through legitimate channels.
Make safety-focused home repairs or modifications. Spending countable funds on documented repairs or safety modifications can convert cash into an improvement to an otherwise exempt home, but the home equity limit still applies.
Pay down other debts using home equity. This shifts the financial picture — home debt goes up (reducing equity), other debts are eliminated.
Free Download
Get the Delaware — Medicaid Long-Term Care Eligibility Checklist
Everything in this article as a printable checklist — plus action plans and reference guides you can start using today.
The Equity Limit vs. Estate Recovery
Don't confuse the equity limit (an eligibility threshold) with estate recovery (what happens after death). Even if the home is exempt during your parent's lifetime, it could still be subject to Medicaid estate recovery after death — unless the home passes through a non-probate mechanism like joint tenancy, a transfer-on-death deed, or a living trust.
Delaware restricts estate recovery to the probate estate, so structuring the home's ownership to bypass probate is a separate but equally important step.
Annual Updates
The home equity limit is adjusted annually on January 1, based on federal CPI calculations. Delaware has historically adopted the minimum federal baseline. Check the current limit before relying on prior-year figures in any planning.
The Delaware Medicaid Long-Term Care & Asset Protection Guide covers the home equity analysis in detail, including worksheets for calculating your parent's equity position and structuring the home to remain exempt through both the eligibility phase and estate recovery.
Get Your Free Delaware — Medicaid Long-Term Care Eligibility Checklist
Download the Delaware — Medicaid Long-Term Care Eligibility Checklist — a printable guide with checklists, scripts, and action plans you can start using today.