Who is eligible for a reverse mortgage?

As people get older, retire, and become senior citizens there is a greater need for residual income, long term care insurance, and money for needs like paying property taxes and home improvements. Many senior citizens meet their financial needs by taking out reverse mortgages on their homes. A reverse mortgage is where the full equity in your home is used to take out a loan that you can use the money for now, but do not have to make any payments or repay the loan as long as you live in the home. This way the homeowners get to continue to live in their home while having a way to get the money they need for a higher quality of life.

As a service to senior citizens the FHA offers a Home Equity Conversion Mortgage, or HECM. This type of reverse mortgage comes with extremely favorable loan conditions with less fees, closing costs, and lower overall interest rates than other reverse mortgages. As a matter of fact, according to the FHA, the HECM reverse mortgages are the least expensive type of reverse mortgage except for reverse mortgages with specific conditions that are available for senior citizens with low to moderate fixed incomes that may be eligible for reverse mortgages for a specific need like paying property taxes or making a necessary home improvement. The HECM can be used for anything the homeowner chooses and has the best loan terms out of all of the reverse mortgages available.

The next question is, are you eligible for a HECM reverse mortgage from the FHA? In order to be considered eligible for a HECM reverse mortgage loan you must:

• Live in the home you are taking the reverse mortgage loan out on. The FHA, and most other lenders, require you to be the primary resident of the home you are borrowing money on in order to be eligible for a reverse mortgage.
• Be at least 62 years of age or older. The HECM reverse mortgage is only offered to senior citizens 62 and older.
• Your home must meet the Department of Housing and Urban Development's minimum property standards. However, if your home needs repairs to help it meet these standards you may still be eligible for a HECM reverse mortgage as long as you are planning to have the repairs to the home made with the money from the mortgage.
• Your home must be at least a year old to qualify for a HECM reverse mortgage.
• You can live in any of the 50 states in the U.S., Puerto Rico, and the District of Columbia and still be eligible for a HECM reverse mortgage.
• The home you own and are planning to take out the reverse mortgage loan on must be a single family residence. Your residence can be up to a four unit building, like a condominium, and some manufactured homes are eligible for HECM reverse mortgages, but mobile homes usually are not eligible.
• All applicants for HECM reverse mortgage must speak to a HUD approved counseling agency before they apply for a loan. This is to make sure that the homeowner is fully aware of what they are getting into. These counselors will go through the exact process of getting a HECM reverse mortgage, what it entails, and all the other possible options available so that the homeowners is well informed before they make a final decision regarding the equity in their home.

For more information on HECM reverse mortgages visit the HUD and to determine if one is right for your circumstances go to for more information.