Home Exchange Program Relieves Burden for Prospective Residents

Members | May 11, 2011

In 2008, St. Louis, MO, based Lutheran Senior Services (LSS) introduced its Home Exchange Program to help seniors make the move from their existing homes to a senior living community. Under this process, individuals can transfer their home to LSS in exchange for a tax-advantaged income stream that never changes during their lifetime. This takes the uncertainty out of the senior’s decision to move. LSS then takes on the risk associated with selling the home, namely when and for how much it will sell.

Paul Ogier, CFO of Lutheran Senior Services (LSS), presented his organization’s innovative marketing strategy during the 2011 Sims Conference in Orlando, FL. The LSS Home Exchange Program allows prospective residents to convert their homes into an income stream via a gift annuity. Based on an appraised value, the fixed payout rate of the annuity is tied to the American Council of Gift Annuities’ recommended rates. The program counters challenges in the real estate market, by relieving prospective residents of the task of selling their home.

By gifting their homes, prospective residents cannot fund the entrance fee with home equity, which is the generally preferred option. LSS has therefore devised other options including paying a minimum entrance fee of $5,000 and instating a higher monthly fee.

The Home Exchange program has created benefits for both prospective residents and LSS. Through the LSS system, approximately 50 current residents participated in the program with a combined home value of over $9 million.

LSS is based in St. Louis, MO.