What is a Reverse Mortgage?

Here’s how it works:

Qualifying homeowners can receive tax-free payments monthly, as a lump sum, or as a line of credit.

• No repayments are required while the borrower lives in the home.
• Social Security and Medicare benefits are not affected.
• The loan is repaid when the home is sold or the borrower moves or passes away.
• Any remaining equity after payoff goes to your heirs.

Keep in mind:

Borrowers continue to own their homes. Because no monthly payments are required, the loan balance grows over time and home equity may decrease.

Borrowers must continue paying property taxes, homeowner’s insurance, and maintain the property. Failing to do so may cause the loan to become due immediately.

Do I qualify for a reverse mortgage?

You must be 62 or older and occupy the property as your primary residence. Existing mortgages must be low enough to be paid off using reverse mortgage proceeds.

All borrowers on the title must apply, attend HUD counseling, and sign the loan documents.

Does my home qualify?

Your residence must meet HUD standards. The reverse mortgage must be the only mortgage on the home.

How is the loan amount determined?

The amount is based on:

• The age of the youngest borrower
• The appraised value of the property
• No income or credit score is required

What are my reverse mortgage options?

The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the FHA. FHA sets loan limits, costs, and requires HUD counseling.

HECM offers 4 draw options:

1. Monthly income for a fixed term or life
2. Line of credit
3. Lump sum
4. Any combination of the above