Do I have to sell the house for Fair Deal?
No — nothing in Fair Deal forces you to sell the family home. Your contribution from the home is capped: it is counted for a maximum of three years, and the optional Nursing Home Loan can defer that part entirely.
Under the financial assessment you contribute 7.5% of the value of assets per year (3.75% for one of a couple). The principal private residence is included in that calculation, but only for the first three years in care — after that it stops counting automatically. Over three years that is 22.5% of the home's value at most.
You do not have to sell to pay it. The Nursing Home Loan lets the HSE recover the home-based portion later from the estate, so no property has to be sold during the person's lifetime to fund care.
If you need the optional Nursing Home Loan, treat it as a separate property-secured part of the process and check the current HSE documentation requirements before applying.