Reverse Mortgages

Basic eligibility

To qualify for a HECM you generally must:

• Be at least 62 years old (all borrowers on title must meet this).
• Own the home outright or have substantial equity.
• Live in the home as your primary residence.
• Complete a session with a HUD-approved reverse mortgage counselor before proceeding.
• Meet FHA property standards.

How you can receive funds

Reverse mortgage proceeds can be structured as:

• Lump sum — a single fixed payment (available with fixed-rate HECMs).
• Line of credit — draw funds as needed; unused credit may grow over time.
• Monthly payments — fixed disbursements for a set period or for life.
• Combination — some lenders blend the above options.

When repayment is triggered

The loan balance becomes due when:

• The last borrower permanently leaves the home (moves to a care facility or passes away).
• The home is sold.
• The borrower fails to maintain the home, pay property taxes, or keep homeowners insurance current.

Heirs typically have the option to repay the loan balance and keep the home, or sell the home and retain any remaining equity. HECM loans are non-recourse — the lender cannot collect more than the home is worth.

Key considerations

Reverse mortgages reduce the equity available to heirs and carry upfront costs: origination fees, closing costs, and an FHA insurance premium. Because interest accrues and the balance grows, the loan is not right for everyone. HUD strongly recommends independent counseling before making any decision. Learn more directly from HUD's reverse mortgage page.