Reverse Mortgages

Yes. You retain title to your home, and the lender places a lien on the property. You must meet occupancy and all other loan requirements. If the loan becomes due and is not resolved under the applicable repayment rules, foreclosure may occur.

You must meet occupancy requirements, keep property taxes and homeowners insurance current, maintain the home, and meet all other loan obligations, including applicable HOA dues. Eligible borrowers have no required monthly principal-and-interest payments while those obligations are met. Interest and fees accrue, so the loan balance generally increases. Repayment is required when a maturity event occurs, such as the last borrower permanently leaving the home or passing away, subject to applicable protections and loan terms. Selling the home or failing to meet loan obligations can also make the loan due and may lead to foreclosure.

Yes. When the loan becomes due, heirs may repay it and keep the property or sell it and retain any remaining equity. FHA-insured HECMs are non-recourse: the home secures repayment, and other assets generally are not liable for a shortfall. Heirs wishing to keep the home may generally satisfy the debt for the lesser of the loan balance or 95% of its current appraised value, subject to applicable repayment rules and deadlines. Eligible spouse protections may affect when repayment is required.

Available proceeds depend on age, property value, interest rates, existing liens, loan costs and program requirements. An existing mortgage generally must be paid off at closing, often using part of the reverse mortgage proceeds, which reduces the funds available to you. Additional funds may be needed if the proceeds do not cover the payoff and costs. There is no single equity percentage or proceeds amount that applies to everyone.

Independent counseling from a HUD-approved agency is required for a HECM. Counseling helps you understand the loan’s costs, obligations, repayment rules and alternatives. Requirements for proprietary programs depend on the chosen program.

Yes, if you qualify. HECM for Purchase is available to eligible buyers age 62 or older; some proprietary purchase programs may allow younger buyers, subject to program requirements and availability. Buyers generally need a substantial down payment or investment of their own funds, plus applicable closing costs. The amount varies based on age, property value, interest rates and program requirements, with the reverse mortgage covering the remaining eligible amount. Eligible borrowers have no required monthly principal-and-interest payments while meeting loan obligations, but must pay property taxes and homeowners insurance, maintain the home, and meet occupancy and other requirements. Interest and fees accrue, the balance generally increases, and repayment is required at a maturity event, subject to applicable protections and loan terms.

For an FHA-insured HECM, using up your equity or a balance exceeding the home's value does not by itself require you to leave the home. You must still meet occupancy and all other loan obligations, including taxes, insurance and maintenance. HECMs have non-recourse protections, subject to applicable repayment rules, but those protections do not prevent foreclosure if loan obligations are not met. Proprietary program protections depend on the loan terms.

Possibly. A spouse who is a co-borrower may remain while meeting the loan requirements. An eligible non-borrowing spouse on a HECM may qualify for a deferral of repayment after the borrower's death, subject to applicable eligibility, occupancy and other loan requirements. Not every spouse qualifies, and protections differ by program and loan date. Review your spouse's status and the loan terms before proceeding.