How do you qualify for a reverse mortgage loan?
My goal is to make sure you're fully informed about this loan so you can make the right call for you and your family. Deciding what to do with one of your biggest assets is never easy, and it deserves real education and honest advice.
NMLS #1960736 · Licensed Mortgage Loan Originator · Equal Housing Lender
A reverse mortgage loan lets homeowners age 62 and older draw on their home's value, paid out in a lump sum, over time, or through a line of credit. Unlike a traditional mortgage, repayment isn't due until you no longer live in the home, the last surviving borrower passes away, or you don't keep up with the loan's obligations.
Those obligations are straightforward: keep paying your property taxes and insurance, and maintain the home to FHA standards if it's a HECM loan. Meet those terms, and you can stay in your home for as long as you live there.
Two main types of reverse mortgage loans
The most common is the HECM, or Home Equity Conversion Mortgage, insured by the FHA. For higher-value homes, jumbo or proprietary reverse mortgages offer another path. As a reverse mortgage specialist, my goal is to walk you through both so you have everything you need to choose what's right for you.
HECM Loan
The Home Equity Conversion Mortgage is insured by the FHA and is the most widely used reverse mortgage option.
Jumbo Reverse Mortgage
A proprietary loan option designed for high-value homes that exceed standard HECM limits.
What it takes to qualify
Age 62+
At least one borrower on title must be 62 or older. In Texas, all borrowers must be 62 at closing.
Primary residence
The home must be your primary residence for at least 6 months of every year.
Sufficient equity
There's no fixed minimum, but as a rule of thumb, you'll want roughly 50% equity since loan proceeds first pay off any existing mortgage.
Financial assessment
A HECM's underwriting looks at your capacity and willingness to keep up with taxes and insurance over time.
You don't need to have your home paid off to qualify. How much you can access depends on the youngest borrower's age, the current expected interest rate, the payout option you choose, and your home's appraised value — generally, older borrowers with higher-value homes can access more.
Get a no-obligation reverse mortgage evaluation and quote today
Get an EstimateThe key features of reverse mortgage loans
No monthly payments required
You'll still pay property taxes, insurance, and upkeep — but no monthly mortgage payment is required.
Flexible payout options
Receive monthly payments, a lump sum, or grow a line of credit over time, based on your goals.
Generally tax-free proceeds*
Proceeds are typically not subject to income tax — consult your tax advisor for guidance on your situation.
Built-in borrower protections
Guidelines like first-year withdrawal limits and financial assessments help reduce the risk of foreclosure.
A line of credit that can grow
Unused funds in a line of credit can grow over time at the same rate as your loan, giving you more to draw on later.
Non-recourse protection
If your home sells for less than the loan balance, your heirs are never liable for the difference.
Which homes qualify
Single-family homes, detached homes, townhouses, and owner-occupied 2-to-4 unit properties are generally eligible. Condominiums must be FHA-approved for a HECM, and some manufactured homes qualify as well — ask me about the specifics for your property.
What happens over the life of the loan
Will you have to repay the lender if you outlive the loan?+
No. As long as a borrower (or qualifying non-borrowing spouse) continues to live in the home, keeps paying taxes and insurance, maintains the property, and meets the loan terms, the loan does not need to be repaid just because you've lived longer than expected.
How will this loan affect my estate and what's left for my heirs?+
Once the last surviving borrower passes away, sells the home, or no longer lives there as a primary residence, the loan balance — what you received plus interest and fees — becomes due. Any remaining equity belongs to you or your heirs. Because the loan is non-recourse, if the balance is higher than the home's value, your heirs can sign a deed in lieu of foreclosure or pay roughly 95% of the appraised value, rather than owing the difference personally.
Should you use a paid service to find a reverse mortgage?+
HUD advises against using any service that charges a fee — beyond the required HECM counseling fee — or that collects a referral fee for sending you to a lender. That counseling fee typically runs $125–$150, and is waived for qualifying applicants who can't afford it. You can find a HUD-approved counseling agency near you by calling 1-800-569-4287.
Options for receiving your loan proceeds
Adjustable-rate reverse mortgage payments can be received in one of five ways:
Tenure
Equal monthly payments for as long as you live in the home.
Term
Equal monthly payments for a fixed number of months you decide on.
Line of Credit
Payments in installments or amounts you choose, whenever you need them.
Modified Tenure
Monthly payments combined with a line of credit.
Modified Term
Monthly payments for a fixed period, combined with a line of credit.*
Get a no-obligation reverse mortgage evaluation and quote today
Get an EstimateReverse mortgage loans vs. a home equity line of credit
A reverse mortgage lets you receive loan proceeds without immediate repayment, as long as you remain in the home as your primary residence, at least one borrower lives there, you meet basic income and credit standards, and you follow the loan's guidelines.
A home equity line of credit works differently — you'll need enough income to cover the debt, and you must keep making monthly principal-and-interest payments. With a reverse mortgage, you still need to meet income and credit guidelines, but you won't make those monthly payments — you'll just keep covering property taxes, insurance, and upkeep.
Reverse mortgages and Home Equity Conversion Mortgages
"Reverse mortgage" and "HECM" are often used interchangeably, but they're not strictly the same thing. The first reverse mortgage loan was made in 1961, and for decades private lenders offered similar loans without the federal protections in place today. It wasn't until 1987 that Congress formalized the HECM, adding FHA insurance and consumer protections to the concept.
Today, the HECM is the only reverse mortgage insured by the FHA and supervised by HUD. Private or proprietary reverse mortgages also exist, offering equity access with no required monthly payments, but with different terms — and they're closely monitored by regulators rather than federally insured. It's worth researching costs, features, eligibility, and rates carefully before choosing between them.
Where reverse mortgages came from
The first reverse mortgage was written in 1961 in Maine, helping a widow stay in her home after losing her husband's income. Private lenders began offering similar loans through the 1970s, though without the FHA protections that exist today.
In 1969, the Senate Committee on Aging held its first hearing on the government's potential role in reverse mortgages. Nearly two decades later, in 1987, Congress formally created the Home Equity Conversion Mortgage as part of an insurance bill, and President Reagan signed it into law in February 1988. The first FHA-insured HECM closed in 1989. Since then, reverse mortgages have grown steadily in popularity, especially through the 1990s, as a federally-insured option that lets seniors access home equity without a monthly mortgage payment.
Let's talk
Connect with me for clear, comprehensive answers — full transparency, with no hidden information.
Get an EstimateFor jumbo and proprietary loan programs, I act as a mortgage broker only — not a direct lender — arranging these loans through third-party providers.
Fixed-rate HECMs are limited to a single lump-sum disbursement at closing with no future draws; adjustable-rate HECMs offer all five payout options shown above, subject to first-year distribution limits.
Certain circumstances can cause the loan to become due and payable, including failure to pay property taxes or insurance, or failure to maintain the property to HUD standards. Credit is subject to age, income, credit history, and property qualifications. Rates, fees, terms, and conditions vary by state and are subject to change.