Adoption Financing – How to Afford Adoption

Couple looking at adoption loan paperwork in preparation of adopting

Now that you’ve decided you want to adopt, how do you finance adoption? Not to worry; there’s good news! Adoption financing is available to help with the cost of adoption for almost all families and we make that process easy.

We believe that loving families and family members who are called to open domestic adoption should be able to open their hearts to a child.

There are many options to help with adoption costs, and an adoption loan is one of those options. It will be important to do your research as there are many different types of loans. It would also be wise to speak with a financial planner to make sure you make the best financial decisions throughout this process for your individual needs. While there are specific loans for the adoption process, there may be other loan options that would work for you as well.  

How Much Does Adoption Cost?

The cost of adoption depends on the type of adoption you pursue. Private adoption costs can range from $30,000 to $60,000.

Expenses may include:

  • Home Study: A report prepared by a home study social worker that is required for every adoption which includes background checks, financial and medical checks and a home visit.
  • Attorney Fees to prepare and file documents and for final adoption hearing
  • Counseling: Peer and Professional Counseling
  • Birth Mother Expenses: Such as medical, transportation to doctor and other pregnancy related expenses
  • Travel Expenses: May be incurred if baby is born out or your area
  • Other Expenses

It is important to review the terms of your contract with your agency to understand what costs are covered with their fees and what costs are not. Make sure you understand what the entire cost of adoption may be so you don’t find yourself in a financial situation you are not prepared for.

Adoption Financing Options

Adoption Loans

If you choose to obtain an adoption loan, do your research. There are many financial institutions and organizations that offer adoption loans. This is not a one-size fits all scenario. You will want to consider your own specific needs and circumstances. Then you will want to compare rates and terms to find the best fit for you.

Some of these programs have very specific requirements to obtain a loan, while others focus more on your credit and are offering personal loans. As you research these loans, you will want to pay close attention to terms and conditions and make sure you are comfortable with the payment schedule.

There are some great loan comparison sites online. Narrow down your options then reach out to a few and confirm their rates and their qualification requirements.
Lightstream logo
At Lifetime, we recommend LightStream for adoption loans. With good credit, you can get a low-interest, fixed-rate loan with no collateral, fees, or home equity requirements.

Other Loan Options:

Borrow from your 401K: One of the best loan options is to borrow from your 401k where you pay yourself back the interest. These loans don’t rely on credit history and you are borrowing from yourself and repaying yourself on a set schedule with interest. Check with your HR department for details.

Home equity loan: If you own your home, you may consider a home equity loan or a refinance of your mortgage to raise the funds you need.

Home equity line of credit: Check with your bank to see if a line of credit is possible. These are often low interest and sometimes tax-deductible.

Whole Life Insurance Loan: Your life insurance may have a provision allowing you to borrow a percentage of the cash value.

Taking out a loan may not be ideal, but it can be a good solution for covering a large, one-time expense. When choosing a loan, consider when you will be able to repay the loan fully. Will this be a long-term repayment plan, or will you receive the adoption tax credits and perhaps adoption assistance from your employer that will allow you to pay back the loan sooner.

family financing adoption
Before taking out a loan, consider all of your options when it comes to financing your adoption journey. These programs are limited at times during the year and have some restrictions.

Adoption Grants

Adoption grants are incredibly popular because they involve no personal cost and carry no interest, unlike other financing options such as adoption loans. Grants are like gifts in that they do not need to be paid back over time. Essentially, they are free grants for adoption.

Another benefit of an adoption grant is that it doesn’t create financial risk. These grants are a risk-free option to pay some or all your adoption costs. You may want to use both an adoption loan and a grant to fund your adoption. Adoption grants are not without challenges, though. Common challenges include an extensive application process, lots of competition, and a long waiting period. Plus, the charity organizations providing funds usually have limited budgets.

Because of these challenges, it’s important not to wait until the last minute to apply for an adoption grant. Instead, give yourself lots of time for the application process and waiting period. Along with this, don’t plan your adoption financing with the assumption you’ll get a grant. They can be challenging to get.

Below, we’ve listed a few organizations currently giving adoption grants. Be sure to review the organization’s instructions and qualifications on how to apply for the grant.

Organizations That Provide Adoption Grants

  • A Child Waits Foundation is an organization that gives grants to adoptive families who are pursuing international and domestic adoptions. The maximum grant award is $7,000.
  • A Chosen Life Adoption is an organization that provides grants in the amount of $5,000 to aid with adoption costs.
  • Angels in Disguise is an organization that provides grants to aid with costs involved in adopting a child with down syndrome.
  • Associates Home Loan: Although this is a loan company, they award adoptive families $1,000 in grants twice a year. They are open to any adoptive families applying as long as you have your home study finished. (Florida Residents Only)
  • Forever Home Foundation: Awards grants to adoptive families for domestic and international adoptions. You must have your home study completed or in the process of completing your home study before you can apply. A simple application must be filled out during or after your home study.
  • Gift of Adoption Fund: This organization was founded by adoptive parents who understand the cost of adoption and want to help other families to finance their adoptions. They provide funds for both domestic and international adoptions.
  • Help Us Adopt: This group supplies adoption grants up to $15,000.
  • JSC Foundation: This organization was founded to provide funding for married, Christian couples. There are four application deadlines per year.
  • Lifeline Children’s Services is an organization that provides grants to aid with costs involved in adoption. The family then asks family, friends, and church community to match the grant.
  • National Adoption Foundation: They award grants to adoptive families for domestic and international adoptions. There is no income requirement set on either end.
  • Show Hope: To care for orphans by engaging the Church and reducing barriers to adoption.

Crowdfunding as an Adoption Financing Option

Crowdfunding is a popular way to raise funds for your adoption. It’s a good way for you to get the word out to your friends and family. First, you’ll create a platform at an approved crowdfunding site like:

Make sure to include your story about adoption and how much it will cost.

Next, you’ll need to let your friends and family know about your adoption fundraiser. Most crowdfunding companies require a small fee to pay for administrative costs. You’ll have all the tools you need to create an amazing crowdfunding campaign. Set up the funds to go directly to your adoption agency so all the donations will be tax-deductible for the donors.

Fundraising – A Fun Adoption Financing Option

Many adoptive families use fundraising to help offset the costs of adoption. There are so many ways to have an adoption fundraiser. Some hopeful adoptive parents have had online auctions, sold adoption t-shirts, set up car washes, or sold homemade salsa.

Work with your church to have a bake sale or other event that your congregation can attend to help you raise funds. Use social media sites like Facebook to notify your friends or family about these events. Most will be happy to help you realize your dreams of adopting a baby.

Organizations like Both Hands are a great place to start. This organization helps both widows and those looking to adopt.

A Lifetime Adoption Foundation 501 (c)3

Lifetime Adoption Foundation

A Lifetime Adoption Foundation offers educational assistance in the form of scholarships to women who have lovingly placed a child through adoption. For children who might otherwise linger in foster care or become institutionalized, the Foundation provides partial funding to adoptive parents. The funding is dedicated to helping adopt those children with special needs or who otherwise may be hard to place.

A Lifetime Foundation does this by providing financial adoption grants. These help defray the costs of adoptions of special needs children, sibling groups, older children, and/or medically fragile children.

A Lifetime Adoption Foundation is dedicated to adoption education, support, adoption resources, and adoption financing assistance to those in need. All gifts of financial assistance are welcome. Gifts designated for a specific program or need are used for the benefit of the program indicated. All gifts and donations are tax-deductible.

Click here to visit A Lifetime Adoption Foundation.

Use the Federal Adoption Tax Credit as Adoption Financing

A happy adoptive family holding there new born adoptive child at home in a blanket

With the tax credit available to families who have completed their adoptions, the cost of adoption can be very affordable. Learning about the IRS’ adoption tax credit before you adopt can help set your budget when you can anticipate the credit you are entitled to.  Additionally, when you file your taxes, you get an additional tax credit for each qualifying child you have per year. The tax credit phases out for taxpayers with high modified adjusted gross incomes.

Qualifying expenses for the adoption tax credit include necessary adoption fees, court costs, attorney fees, traveling expenses, and other expenses directly related to the adoption.

Adoptive parents who plan to claim the credit should file Form 8839, titled Qualified Adoption Expenses, and attach it to Form 1040. There is also a tax deduction for each qualifying child. (Please check with the IRS for updated information.) For more information and other downloads to required forms, please visit this link on the IRS website.

Employer Adoption Reimbursements

adoptive parents looking down at newborn

Many employers are now offering a range of benefits for their employees who choose adoption. Not only are employees eligible for some sort of paid leave, but many are finding that their employers are offering reimbursement to help defray some of the adoption financing expenses themselves.

Your employer may also offer an Employee Assistance Program (EAP). This is designed to help workers deal with dramatic situations in their personal lives. You may find that speaking with an EAP counselor can aid the ups and downs of an adoption experience.

Check into your employee adoption benefit. More small- and medium-sized companies are offering some type of adoption credit for their employees.

For example, Verizon has a $10,000 adoption benefit, and Pepsi has a generous adoption benefit, as well. Small companies have found tax benefits to offering these adoption incentives to their benefit package. Ask your human resources department for details.

You can also find out more by contacting the Dave Thomas Foundation for Adoption’s “Adoption-Friendly Workplace” program. They work to make adoption an affordable option for every working parent. You may contact the Adoption Friendly Workplace at 1-877-777-4222 for details on how to request that your employer establish a program, or visit their website.

Military Adoption Benefits

The United States military has resources for adoptive families not available elsewhere. Active military families are eligible for a one-time adoption financing assistance subsidy program of up to $2,000 per child or $5,000 maximum amount for sibling groups.

These reimbursements and adoption financing benefits are provided to single or married adopting parents and can be used for domestic or international adoptions. For more information on the program, you may click here. In addition, Lifetime provides a discount for military adoption to show our gratitude for your service to the country.

young boy with flower carried by adoptive mom

Government Subsidies for Adoption Financing

Federal and state assistance to adopt a child is available. These subsidies can ensure that families who adopt hard-to-place or waiting children have the crucial services and financial resources to meet their children’s continuing needs.

Adoption subsidies are available for your child whether your home study was done by a public or a private agency, but will vary by state and region. Research what is available in your area.

It is often easier to have your adoption agency assist in the paperwork if you are adopting a waiting child through them.

Don’t take no for an answer, it can take a lot of work, and you will need help.

Click here for help and more information.

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If you live outside of the United States, please click here.

“We first approached Lifetime in 2016 and everyone was so welcoming and knowledgeable. We were not ready to move forward at that time but we returned to Lifetime three more times before we finally got the nerve to take the leap! Each time we connected with Kim King she answered every question, made us feel welcomes and assured us that God would reveal to us when the time was right for our adoption. We signed on in 2019 and we completely loved and cared for by each Lifetime staff person we encountered. When we were matched and placed on 6 months into our wait (before we even got to do our video!), Christie was right there every step of the way, even when we were really struggling with the tremendous life change. All in all we felt loved and cared for. We weren’t just numbers to Lifetime, we were a family, they knew us by name and took time to be with us in the good and hard times. I cannot express my gratitude for this agency and for this team of professionals.”
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