Frequently Asked Questions about the U.S. Department of Housing and Urban Development's Reverse Mortgage Program

The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program, which enables you to withdraw some of the equity in your home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more. To learn more, visit HECM Reverse Mortgages

1. What is a reverse mortgage?
Senior citizens in the United States aged 62 and over have the opportunity to benefit from what is known as a reverse mortgage. A reverse mortgage is an arrangement the homeowner enters into with a lender that will allow the homeowner to receive payments from the lender based on the amount of the equity the homeowner has in the property. Payment may be in the form of monthly payments, a lump sum, in the form of a revolving line of credit or any other agreed payment terms. Some lenders are flexible, and will allow homeowners to combine options for payment.

The beauty of a government insured reverse mortgage is that the homeowner needs not worry about repayment while alive. Once the homeowner continues to live primarily on that property and upholds the terms of the reverse home mortgage, repayment is not required until after the homeowner dies. In the case of a couple, repayment is not required until after the surviving party passes.

2. Can I qualify for FHA's HECM reverse mortgage?
How to Qualify for HECM Reverse Mortgages  

1. the borrower(s) must be over the age of 62.
2. The property must be the primary residence of the borrower.
3. The homeowner(s) must maintain their property taxes and home owners insurance. Borrowers have to go through a debts compared to income process to make sure they can maintain their property taxes and homeowners insurance.
4.  There must be enough equity within the home in order for the borrower(s) to qualify get the HECM Reverse Mortgage.

3. What types of homes are eligible? To be eligible for a HECM Reverse Mortgage, you must live in a single family home, a 2-4 unit home with on unit occupied by the borrower or a U.S. Department of Housing and Urban Development approved condominium or manufactured home.

4. Will we have an estate that we can leave to heirs?  When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds beyond the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to heirs.  No debt is passed along to the estate or heirs.