You’ve spent half your life or more taking care of others...
College tuition. Weddings. The dog’s vet bill when he mistook that bee as his pal. You (and your wallet) have been there for your loved ones through thick and thin. And now you’re ready to put your own financial needs first.
Reverse Mortgage Eligibility Requirements
A reverse mortgage involves fewer restrictions than you may think.
Reverse mortgage eligibility requirements typically include factors such as age, home ownership status, and the value of the property. To qualify for a reverse mortgage, the applicant must typically be at least 62 years old and own their home outright or have a significant amount of equity in the property. The home must be the applicant’s primary residence, and they are usually required to attend a counseling session to ensure they understand the terms and implications of the loan. Additionally, applicants must demonstrate the financial capability to cover property taxes, insurance, and maintenance costs. Credit score and income are generally not considered in the eligibility assessment, making reverse mortgages an option for seniors with limited income but substantial home equity. Contact us to learn more about reverse mortgage eligibility and if a HECM loan is right for you.
- Borrowers only need to be at least 62-years-old for an FHA-insured loan and 55-years-old for a Jumbo loan
- Borrowers must have at least 50 percent equity in their home, but there is no minimum limit on your home’s appraised value or how much equity you can tap into; however, as of January 1, 2022, the MCA (maximum claim amount) for HECMs is $970,800
- The borrower(s) must live in the residence
- A spouse can be listed on the loan as an NBS (non-borrowing spouse); however, only actual borrowers may withdraw funds*
- Two borrowers do not have to be married
- Borrowers are responsible for property taxes, homeowners insurance, and all other property fees
- Some reverse mortgage programs enable you to incorporate property taxes, homeowners insurance, and other property fees into the loan
- With an FHA-insured loan, your principal loan limit is calculated based on either your home’s appraised value or $822,375—whichever is lowest
- With a Jumbo loan, you can draw up to $4 million in equity, depending on your home’s appraised value
- Reverse mortgage counseling is required to ensure you receive unbiased information about reverse mortgage loans and can be done face-to-face or over the phone
- Similar to when applying for a traditional loan, a reverse mortgage financial assessment is also required (review of your credit history, source(s) of income, employment history, debts, etc.)
| LOAN TYPE | BORROWER SCENARIO | ELIGIBLE | RESTRICTIONS |
|---|---|---|---|
| FHA | Married couple. One spouse is 60, and the other is 63. | The 60-yr-old NBS cannot access or draw any funds from the HECM.* | |
| Jumbo | Unmarried borrowers. One person is over 55, and the other is not. | Both borrowers must be over 55 in a non-married scenario.* | |
| Jumbo | Siblings. One is 56, and the other is 53. | Both borrowers must be over 55 in a non-married scenario.* | |
| FHA | Siblings. Both over 62. | None.* | |
| Jumbo | Married couple. Both over 55, but one spouse permanently resides outside the home. | The spouse residing outside of the home cannot draw funds from the credit line.* | |
| FHA | Married couple. Both over 62, but one spouse permanently resides outside the home. | The spouse residing outside of the home cannot draw funds from the HECM.* |
*Texas requires both spouses to be listed as borrowers and over 62 years of age; they do not allow an NBS (non-borrowing spouse) to be listed on the loan.
