If the house is owned jointly, then half of the proceeds will go to your dad. This will likely make him ineligible for Medicaid until the funds are spent down. The other half of the proceeds would go to your mom, which she can use to purchase a house. Spouses are allowed to retain some assets — called a community spouse resource allowance — but the amount varies, depending on the state. In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $119,220 (in 2016). The least that a state may allow a community spouse to retain is $23,844 (in 2016). For information on protections for the community spouse, click here. (For the amount that your state allows community spouses to retain, go to Find an Attorney, click on your state, and then "Key Medicaid Information" for that state.)
This is complicated and the rules vary from state to state. We strongly recommend that you consult with an elder law attorney in your state to find out the best way to accomplish the sale. To find an attorney near you, click here.