This is a tough situation that I have experienced with clients in the recent past and it has become even more acute as economic conditions remain challenging.
The true issue is that purchasing the house from mom at this point may not make economic sense as I'm sure the property value has fallen appreciably and the mortgage balance is substantial.
Moreover, if you are not employed and the only household income is mom's Social Security, how do you propose to qualify for a mortgage?
Then there is the issue of maintaining Medicaid eligibility. If mom sells the house to you, which she must do at fair market value, the proceeds will have to be disposed of in the month received to maintain Medicaid eligibility.
Obviously if she gives a gift of the proceeds back to you or another party she will lose eligibility and if she holds the proceeds she will lose eligibility. There are, however, techniques available to deal with this issue.
This presupposes, though, that she actually realizes a cash gain from the sale. If she sells the property to you, and realizes no cash, then she should have no problem maintaining eligibility.
But again, unless there is a co-signer or you have some way to secure a mortgage under these circumstances, the point is moot.
Barring some economic miracle, I'm sorry to say the more likely outcome is that upon mom's demise you will end up letting the bank take the house and that is what you should plan for.
But who knows, if you leave things as they are for now and values have recovered enough by the time of mom's passing and you have some income at that point you may be able to make it work out.