Opinion Please

[Moneymum]

Good afternoon.
I have a developmentally challenged adult cousin that I handle her finances.
Thus far, I have been able to penny pinch for her. She has a condo that has a balance on her mortgage of approx $22,000 and payments are $425 a month.
That is the exact amount she receives monthly in alimoney.
She has three Ira's worth 17,000, 18,000 and 3000.
She has a room mate that helps with the rest of the bills inexchange for rent.
My dilemma is, her place is in dire need of rehabbing and the only funds are the Ira's.
She has a little part time job that of course doesn't pay much so that woldn't pay for it.
Should I have her cash her Ira's and pay off the mortgage and rehab?
Should she cash, rehab and sell the place and put proceeds in a fund, and rent a condo? She is not a housekeeper and the place gets junked up pretty quickly. HELP!!!!!!

[Fern]

What's the interest rate on the mortgage?
What's her age?

My first reaction would be that cashing in the IRAs is not a good idea, espeically if she's younger than 59 1/2 because there are early withdrawal penalties

What kind of renovation does the condo need?

[Moneymum]

Good afternoon Fern,
The interest rate is 9%
and she will be 58 in Sept.
Kitchen, living room, sliding door, bathroom, carpet, tile.
She's on the second floor, and recently overflowed her bath tub and damaged her neighbor's condo below. I feel she would be better renting instead of owning.

[Fern]

I understand that when it comes to the rehab/renovations, all of that will fall on you.

However, I just would never recommend cashing in her retirement money unless it was a true emergency/dire straits, especially as she doesn't have anything else to fall back on in her later years. Don't know what area you live in, or how the real estate market is faring there, but is there a chance you could sell the place (albeit at a lower price) as is, as a fixer upper for a first time homebuyer?

[Moneymum]

The repairs would fall to me, but I enjoy doing that.
She lives in the Metro DC/MD area and the other concern for me is the high rentals if she sells and goes that route, unless she rents with other friends.
I understand what you are saying about cashing in the Ira's.

[SuzeOFan]

Sorry, but cashing someone else's retirement fund to fix up a condo doesn't sound like good sense to me.

If it just needs a facelift, try getting her to throw out some accumulated junk, Everyone has it! (maybe earn some extra cash with it at a yard sale) and give it a new coat of paint. It's amazing what a coat of paint can do for a room.

[marjorie]

Whoa! with so little income, see if you can get a grant to fix up the place. Try calling your local Community Development office, and see what they suggest. I'd also try P.E.A.C.E. and perhaps the local office of the aging. Let them know what you are up against... Very often grants only require 3 years of living in the space before it can be sold. It would leave her retirement money intact,and increase her net worth. Worth a try, in my view.

[boefixepa]

Does she qualify for any assistance? There are SOOOOOO many programs out there that our taxes are paying for, see if you can find one.

Also see if there is an assisted living place she could qualify for? maybe keeping her in a halfway kind of house where they clean for here would be more benifical for her. Then you can clean the condo up best you can and sell it. It has to be worth more than the 22K in the DC area, even if it needs some TLC. Sell it cheep without the repairs and let the new home owner worry about that. Then take the proceeds and put then in the IRAs for her. Even if the halfway house is a bit more than the house payment the sell will offset that for quite a few years.

She's getting on in years and will soon need more help than just house cleaning. Have you looked into what you are going to do when she need that? Maybe sooner would be better than later?

Just my two cents

[Moneymum]

Thanks for your replys.
I will look into the Dept of aging and see what I can find.
I do admit, I have tried the ARC and they have been a help in other area's but really don't have any housing advise.
It makes it tough to converse during the day while I am at work, and I have been off with my daughter and new baby helping her get back on her feet after a C section.

[marjorie]

ARC is certainly wonderful as a resource for some things, but I'm afraid this will not be one of them. What you need to find (in my humble...) is some government entity tha you can get excited. Office of the Aging might help, but I think it will be easier to get people excited by her low income than anything else. Does she qualify for HEAP? Our local phone company will cut their normal rate by more than half for what they call a "lifeline phone". A lot of big money grants have just come down the pike for restoration and rehab, but the money disappears quickly. I'd try to make this a high priority, although I do realize other obligations also require your time and effort. Very often once the paperwork is in place you are placed on a waiting list and won't have to worry about it again. If it works as it has for friends here, she will get a call saying whether or not she qualifies and giving a date to look over the home, or start actually doing work. HTH

[CRFSaver]

As someone who just moved from the DC area 6 months ago I would have loved to find a place for 450 a month. You wont except in the ghetto...