Do Both Spouses Have to Be 62 for a Reverse Mortgage?

A reverse mortgage is a financial tool allowing homeowners aged 62 or older to convert a portion of their home equity into cash without needing to sell their home or make monthly mortgage payments. It provides funds to supplement retirement income, cover living expenses, or address unexpected costs. While the age 62 requirement is central to eligibility, specific circumstances apply when a couple is involved, especially if one spouse is younger than 62.

General Reverse Mortgage Eligibility

To qualify for a Home Equity Conversion Mortgage (HECM), the most common reverse mortgage, the primary borrower must be at least 62 years old. Some proprietary reverse mortgage products may offer a lower minimum age, sometimes as young as 55, though these are less common and not federally insured. The homeowner must possess significant equity, typically at least 50%, and any existing mortgage must be paid off at closing using personal funds or the reverse mortgage proceeds.

The property must serve as the borrower’s primary residence. Eligible property types include single-family homes, 2-4 unit properties (provided one unit is owner-occupied), and condominiums or manufactured homes that meet specific HUD approval standards. Borrowers retain ongoing financial responsibilities, including timely payment of property taxes, homeowner’s insurance, and home maintenance.

Lenders conduct a financial assessment to ensure borrowers can meet these obligations, as failure to do so can lead to loan default and foreclosure. Before obtaining a HECM, all prospective borrowers must complete a mandatory counseling session with an independent agency approved by the U.S. Department of Housing and Urban Development (HUD). This counseling provides an overview of the loan’s features, costs, and financial implications, ensuring an informed decision.

Provisions for Non-Borrowing Spouses

It is not a requirement for both spouses to be 62 years old to obtain a reverse mortgage. A couple can qualify if one spouse is 62 or older and the other is younger, provided the younger partner is designated as a “non-borrowing spouse.” This designation applies to FHA-insured HECMs and offers specific protections. The non-borrowing spouse is married to the borrower but is not formally listed as a borrower on the loan itself.

Under HECM guidelines, an eligible non-borrowing spouse can remain in the home after the borrowing spouse’s death or if the borrowing spouse moves into a long-term care facility for over 12 consecutive months. To qualify for these protections, the non-borrowing spouse must have been legally married to the borrower at loan closing and remained married until the borrower’s death. They must also have occupied the home as their primary residence at loan closing and continue to do so.

The non-borrowing spouse must continue to meet all loan obligations, including timely payment of property taxes, homeowner’s insurance, and home maintenance. The presence of a non-borrowing spouse results in a lower principal limit, or loan amount. This is because the loan amount calculation is based on the age of the youngest spouse, whether borrowing or non-borrowing, which anticipates a longer loan term and reduces available funds.

They must be formally identified on the loan documents as a non-borrowing spouse and sign certain application and closing documents. A non-borrowing spouse does not have direct access to loan proceeds or any line of credit; these payments cease upon the borrowing spouse’s death or permanent departure from the home.

Considerations for Couples

Couples considering a reverse mortgage should engage in joint decision-making, with both spouses understanding the loan’s terms and implications, even if only one is the primary borrower. This process should involve discussions about their financial goals, potential risks, and long-term plans for retirement and living arrangements.

A reverse mortgage impacts estate planning, as home equity decreases over time due to interest accrual and funds drawn, potentially reducing inheritance for heirs. While the loan is non-recourse, meaning heirs are not personally liable if the loan balance exceeds the home’s value, they will need to repay the loan or sell the home to retain ownership. This necessitates clear communication with heirs about the reverse mortgage’s implications for the property.

Failure to meet these obligations can lead to the loan becoming due and payable, potentially resulting in foreclosure. Couples should assess their future financial needs, considering how a reverse mortgage aligns with their overall retirement strategy, including potential long-term care expenses.

The proceeds from a reverse mortgage do not affect Social Security or Medicare benefits, as these programs are not means-tested. However, means-tested government programs, such as Medicaid or Supplemental Security Income (SSI), could be impacted if reverse mortgage funds are held as liquid assets for extended periods, affecting eligibility. Consulting with a financial advisor or benefits specialist can provide clarity on specific situations.