A Home Equity Conversion Mortgage loan, or Reverse Mortgage, is a Federally-insured reverse mortgage loan backed by the U. S. Department of Housing and Urban Development (HUD). If you qualify, a HECM loan would enable you to withdraw a portion of your home’s equity. which can be used to pay for unexpected expenses, such as nursing home costs or long-term care. It could also provide you with additional cash flow for all the expenses you have. As long as all loan terms are met, the loan does not require repayment until the last surviving borrower permanently moves out of the home, or passes away. Some of the HECM Reverse Mortgage qualifications include: 

• Borrower(s) must be 62 years or older

​

• Must be a homeowner and either own home outright or have significant equity; must live in the home as  a primary residence (live there 6+ months per year)

​

• The property must be a single-family home, 2- to 4-unit dwelling or FHA-approved condo

​

• Must meet minimal credit and property requirements

​

• Must receive reverse mortgage counseling from a HUD-approved counseling agency

​

• Must not be delinquent on any federal debt

​

>> DOWNLOAD AN EDUCATIONAL HECM BOOKLET<<

The HECM for purchase is a reverse mortgage insured by the Federal Housing Administration (FHA) that allows seniors to use the equity from the sale of a previous residence to buy their next primary home in one transaction. Regardless of how long you live in the home or what happens to your home’s value, you only make one initial investment (down payment) towards the purchase. However, you must continue to pay taxes and insurance (and homeowner association dues if applicable), and maintain the home.  This may allow you to:

​

• Build a new customized home

​

• Relocate closer to friends and family members

​

• Purchase a home in a senior housing community

​​

• Downsize to a smaller, easier-to-maintain home

​​

• Purchase a primary residence suitable for your current needs

​​

• Move into a new home that’s easily accessible with modern amenities

​

>>DOWNLOAD AN EDUCATIONAL H4P BOOKLET<<

A regular home equity line of credit (HELOC) requires monthly payments, does not grow, and can be called due by the lender at any time. A reverse mortgage line of credit has a clear cut advantage over the HELOC, in that it has a growth option that applies to the unused funds. If you take this out at 62 rather than 82, and leave the funds to grow instead of using them, you could have a substantial credit line available in later years when you may need it most.

It is a home loan that allows older homeowners to access a portion of the equity they have in a high-value property and allows them to defer repayment to a later date.

​

As a borrower, you have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all. Of course, you must still maintain the home and pay homeowners insurance and property taxes, just like a traditional mortgage. 

​