The Home Equity Conversion Mortgage or FHA-Insured Reverse Mortgage can be used by senior homeowners age 62 and older to convert the equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home. The loan, commonly known as HECM, is funded by a lending institution such as a mortgage lender, bank, credit union or savings and loan association.

Reverse Mortgage Borrower Requirements:

• Age 62 years of age or older
• Own your property
• Occupy your property as primary residence
• Participation in a consumer information session given by an approved HECM counselor

Reverse Mortgage Amount Based On:

• Age of the youngest borrower
• Current interest rate
• Lesser of appraised value or the FHA insurance limit

Reverse Mortgage Financial Requirements:

• No income or credit qualifications are required of the borrower
• No repayment as long as the property is the primary residence
• Closing costs may be financed in the mortgage

Reverse Mortgage Property Requirements:

• 1 family home or 1-4 unit home with one unit occupied by the borrower
• Condominiums or Planned Unit Developments (PUD) must be HUD-FHA approved
• Cooperatives that meet HUD guidelines
• Mobile Homes that meet HUD guidelines
• Meets minimum property standards (borrower may fund repairs in the mortgage)

For more info, check out How HUD’s Reverse Mortgage Program Works.

©2004, HUD, U.S. Department of Housing and Urban Development. For more information, visit the HUD website.

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