You can buy it, but it must be for fair market value; if it is not, then since Medicaid would have a claim on it (if she needs Medicaid-paid-for care within 5 years of the sale), the sale could be voided or set aside (that is, undone) as one made to defraud creditors and/or in violation of Medicaid rules. If it's a fair market value sale, then while Medicaid can reach the money she was paid for it, they can't undo the sale of the house."Fair market value" does not mean top dollar. Example: in my town, a 1,600 to 1,700 sq. ft. house could realistically go for between $450k and $525k--you can find comparables in that range. You can buy the home (in this example) for $450k (i.e. bottom of the range) and since it's backed by comparables, it's a fair market value sale. If you do it as a for sale by owner without realtor transaction, you would very likely knock another 5-6% off for saving the commission, to get it for around $420k - $425k; and if it's bought without any contingencies or doing any work on it, that might justify a price between $400k and $420k. Lower than that, though, in this example, would be a potential problem and could be attacked and set aside. So you can get a good deal on the home, but it has to be within the realm of what a 3rd party might be able to get the home for under similar (no realtor; good closing date; no contingencies) circumstances.