Retire in the comfort of your own home with no monthly mortgage payments!*
Reverse mortgage options are available for homeowners age 62 and over.
*Borrowers must live in the home as their primary residence, remain current on the property taxes,
homeowner’s insurance and HOA dues and maintain the home per FHA requirements.
WHAT IS A REVERSE MORTGAGE?
A reverse mortgage enables homeowners 62 & older to convert home equity into tax-free cash without selling their home. A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you have built up over years of making mortgage payments can be paid to you.
However, unlike a traditional home equity loan or second mortgage, Home Equity Conversion Mortgage (HECM) borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you can use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
- You do not give up title to your home.
- You make no monthly mortgage payments if you occupy your home as your primary residence, maintain your property, and remain current on the property taxes, homeowner’s insurance and HOA dues.
- No prepayment penalties.
- Although the loan is not due and payable until you permanently move out of the home, it can be paid off at any point without prepayment penalties.
- There is no time limit to how long the homeowner(s) may remain in the property. If one or both homeowners remain in the home as the primary residence and remain current on the property taxes, homeowner’s insurance and HOA dues, neither you nor your spouse will be required to leave or sell the home.
- Your home does not need to be free and clear. Elimination of the current mortgage is one of the most common reasons seniors apply for a reverse mortgage.
- You, or your heirs, retain 100% of the remaining equity upon the sale of the home.
You must be at least 62 years or older.
Since reverse mortgages were designed to help seniors age in their home, this loan is only available to individuals within retirement age.
You must own your home.
You must be on the title of the home. You must also either own your home outright, or have a low enough remaining mortgage balance for the reverse mortgage loan to pay it off.
Your home must be your primary residence.
Again, because this loan was meant to help seniors stay at home, borrowers must live in the home and cannot live elsewhere for more than 12 consecutive months.
You must complete a counseling session with a HUD-approved counseling agency.
The U.S. Department of Housing and Urban Development (HUD) provides a list of third party agencies for you to choose from.
Your home must be a single-family home or a 4-unit maximum multi-family home with one unit occupied by you.
Per HUD, the most common type of property eligible for a reverse mortgage is a single-family home. If your property is a multiple family home, then one of the units must be your primary residence.
Your home can be a manufactured home if it meets FHA requirements.
You can check the Federal Housing Administration’s (FHA) website for these requirements
- Your home can be a condominium if it is HUD-approved.
There are certain kinds of homes that simply do not qualify for a Home Equity Conversion Mortgage (HECM) loan. Vacation homes or secondary homes are not approved under reverse mortgage qualifications because they aren’t considered the homeowner’s primary residence. If your home is on income-producing land such as a farm, then it is not eligible.