<p>There are families who have very low income but have inherited family land or the family house. My friend got a very expensive paid for house as part of her divorce settlement By living on a HELOC, her income was very low for a number of years. Her home equity basically paid for her house and other living expenses. Her EFC was very low and her kids got full PELL and full state grants. AT schools that used FAFSA only, they were eligible for all kinds of financial aid. That was with a father who made over a half million a year and had millions in assets since FAFSA excludes his financial and primary home equity.</p>
<p>My MIL has land that just sits there. Should be sold but she is adamant in keeping it, so for now she pays to keep it. </p>
<p>it’s not unusual to have a paid for house through various means-parents paid for it, an former marriage paid for it, an inheritance was used to buy a home outright. In such cases, it’s important to find out directly from the fin aid office whether primary home equity is capped. When you own, say a million dollar house, that cap can make a huge difference if your income is low. Uncapped, that’s an asset that can give you a $50K EFC right off the bat and that’s if a school uses the FAFSA 5% hit which they are not required to do with some using different percentages. In some areas, a million dollar house is not luxurious. My brother lives in a very, very simple ranch that is valued at that amount, a house not much bigger than a double wide trailor home. Very simply made too, no high end extras. It’s the location that makes it so pricey.</p>
<p>So those living in high priced homes with high home equity, can look for schools that cap that value at say 1.2X income or 2.4X, both figures I’ve seen. Maybe not include home equity–don’t know of any such school offhand. </p>