Reverse Mortgages

How the Reverse Mortgage Works

In order to be qualified for a reverse mortgage, you must meet the following requirements:

Borrower Requirements
You must:

  • Be 62 years of age or older
  • Own the property outright, have equity or wish to purchase a home
  • Occupy the property as your principal residence
  • Receive counseling from a HUD- approved reverse mortgage counselor
Property Requirements
The following eligible property types must also meet all FHA property standards and flood requirements:

  • Single family home or 2-4 unit home with one unit occupied by the borrower
  • HUD-approved condominium project
  • Manufactured home that meets FHA requirements
Features & Benefits
The amount of money you can receive is based on the age of the youngest borrower, prevailing interest rates and the lesser of the appraised value of the home, sale price or maximum lending limit. No monthly mortgage payments are required.However, the borrower must continue to pay taxes and insurance and maintain the home according to FHA guidelines. Interest and fees are added to the principal balance each month, resulting in a rising loan balance over time.Borrowers may remain in the home indefinitely, even if the loan balance becomes greater than the value of the home – so long as the borrower meets the loan obligations.Because Reverse Mortgages are non-recourse loans, you or your heirs will never owe more than the lesser of the value of the home or the loan balance, provided the home is sold to repay the loan.Borrowers pay a mortgage insurance premium (MIP) which protects the borrower by ensuring they continue to receive their payments in the event the lender becomes insolvent.