Reverse Mortgages

A reverse mortgage allows you to withdraw a portion of your home’s equity to be used any way that you like. This excludes you from requirements to make payments on the funds you have drawn. As a homeowner, you’re required to keep the property taxes and the homeowner’s insurance current. You have the freedom to stay in your home as long as you like and your loan will be repaid in the event of your death or desire to sell your home. Reverse mortgages are insured by the FHA and don’t require you to forfeit the title to your home or any of your rights as the homeowner. You or your heirs will decide when or if the home is to be sold. After repaying the loan balance, all remaining equity in the home belongs to you or your heirs.


Recent studies, including the March 2012 study published by Texas Tech University, document that by including a reverse mortgage line of credit in a retirement plan you can increase the likelihood of a lifetime cash flow from 55% to 90%.

The answer to what if

Many individuals in retirement find themselves asking a plethora of “what if” questions. What if I can’t pay my monthly mortgage payments? What if unexpected home repairs come up? What if health problems affect my financial situation? What if my savings aren’t enough? Reverse mortgages can put a lot of these worries at ease. Reverse mortgages are safe and secure and give seniors the ability to remain homeowners without the burden of mortgage payments. This allows senior homeowners to retain their financial independence and peace of mind.

How do I qualify?

  1. Homeowners must be 62 or older.
  2. The home must be your primary residence
  3. The type of home and condition of the home must meet FHA guidelines

How will I receive the funds? How can I use the money?

You’ll select the method through which you’ll to receive the funds. You can receive some at closing, through monthly installments, or use a line of credit to draw funds as your needs dictate.

Some of the common ways such funds are used include:

  • Eliminating current mortgage payments
  • Paying off installment or revolving debt
  • Paying for home repairs and property taxes
  • As a safety net for handling unexpected expenses and emergencies
  • Funding in-home health care

Although reverse mortgages are by nature simple, you will appreciate sitting down with a LOCAL expert as you consider whether one is right for you.

*This information was not produced by HUD or FHA and the information was not reviewed or approved by the Department or Government Agency.