My godmother's home has to be sold to take care of her in a nursing home. Does the money go straight to the nursing home?

Also couple of other things….. did your godmother ever have you down as her dependent? As you lived with her from your childhood age 4 till now at age 50? If you were her legal dependent that might change what type of “standing” you have with being an occupant of the house. And if there were agreements btw you 2 as to your rights to live there as long as you paid some property costs. None of this type of stuff is ever a DIY. I’d find the legal clinic and go with whatever paperwork you have asap to see if you might be a tenant or have use of property.

FWIW the NH is NOT forcing anyone to do anything. NH has no legal authority over a property owned by a resident in that NH. My guess is what is actually happening is that your godmother needs care in a skilled nursing care facility aka a NH. That something happen, like a fall or an illness, that caused her to go from the hospital or the ER over to a NH for care. & her POA - which is her niece - has to come up with a way to pay for Aunties bill at the NH. And the Niece has decided that by selling the home, it will resolve 3 problems: 1. how to pay Aunties NH bill and 2. how to get rid of Aunties old house & 3 get you & your family out of her Aunts house.

if the Lady has $, the Niece as a PO is likely using that $ to pay the bill but eventually that $ will run out. So selling house gives Niece $ continue to private pay the NH bill
OR
the lady has no $ but can be eligible for LTC Medicaid. So niece has applied for that & the lady is either Medicaid Pending or Medicaid eligible.
Whichever one it is, she no longer has any $ to pay any bills, like property taxes, insurance, etc on the home in her name anymore, as all her $ is going to pay for the NH, so selling the home makes sense to do.

Neice is either unaware of your being a tenant or is choosing to ignore this. Ditto if you have some sort of agreement with your godmother on ability to live there no matter what. You have to get an attorney to deal with this. 46 years is a lifetime to be there. Find your own attorney & asap.

The POA is in charge of the decision making. It’s as Alva described.

If you & your kids can legally be considered a tenant, then the POA will have to go thru whatever legal process your State needs to remove tenants. If your driver’s license show the house as the address; if your registered to vote at this address, get mail / bills to this address, you are a tenant. Even if you have not paid rent. If so, I’d suggest that you asap find a probono / free legal clinic and get them to advise you as to your rights as a tenant. As a tenant, the owner or their POA cannot just shut off utilities or change out locks, they have to go thru a notification process which tends to be they file a complaint along with a bond at the courthouse and the sheriffs Dept needs these done before they come to do an eviction. But you imo have to make her aware of your rights as tenants.

The Niece who is POA is the one who can answer this. We can't know if POA has applied for medicaid. If so, the home doesn't need to be sold until your Mom has passed and at that time there would be "clawback" on the proceeds of the sale.
I know that you know your Mom is in care now, and that you are on your own. Her home is not your home despite your having lived there for 50 years. You will have to get your own job, and your own place to live, as is the case with all kids when they fly the nest. I wish you the best. Start with a shelter if you need to.
As to your grandchildren, can you tell us a bit more? Are their parents alive and responsible for them and their housing, or are they out of the picture.
I wish you the very best. Speak to the Niece who currently is the Lioness at the Gate.