By U.S. Department of Housing and Urban Development (HUD)—The Home Equity Conversion Mortgage or FHA-Insured Reverse Mortgage can be used by senior homeowners age 62 and older to convert the equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home. The loan, commonly known as HECM, is funded by a lending institution such as a mortgage lender, bank, credit union or savings and loan association.

Reverse Mortgage Borrower Requirements:

  • Age 62 years of age or older
  • Own your property
  • Occupy your property as primary residence
  • Participation in a consumer information session given by an approved HECM counselor

Reverse Mortgage Amount Based On:

  • Age of the youngest borrower
  • Current interest rate
  • Lesser of appraised value or the FHA insurance limit

Reverse Mortgage Financial Requirements:

  • No income or credit qualifications are required of the borrower
  • No repayment as long as the property is the primary residence
  • Closing costs may be financed in the mortgage

Reverse Mortgage Property Requirements:

  • 1 family home or 1-4 unit home with one unit occupied by the borrower
  • Condominiums or Planned Unit Developments (PUD) must be HUD-FHA approved
  • Cooperatives that meet HUD guidelines
  • Mobile Homes that meet HUD guidelines
  • Meets minimum property standards (borrower may fund repairs in the mortgage)

For more info, check out How HUD’s Reverse Mortgage Program Works.