Reverse Mortgage

A reverse mortgage is a special type of loan made to older homeowners to enable them to convert the equity in their home to cash to finance living expenses, home improvements, in-home health care, or other needs.

With a reverse mortgage, the payments are "reversed." Payments are made by the lender to the borrower, rather than monthly repayments by the borrower to the lender, as occurs with a regular home purchase mortgage.

A reverse mortgage is a sophisticated financial planning tool that enables seniors to stay in their home and maintain or improve their standard of living without taking on a monthly mortgage payment. 

Borrowers usually have a choice of receiving the proceeds from a reverse mortgage in the form of a lump-sum payment, fixed monthly payments for life, or line of credit.

BORROWER REQUIREMENTS

• 62 years or older
• Own or have substantial equity in the home
• Occupy the home as a primary residence
• Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.

PROPERTY 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

THE FINE PRINT

Borrowers must not be deliquent on any federal debt and participate in a consumer information session given by a HUD-approved HECM counselor. Certain restrictions apply.