How Old Do You Have to Be to Have a Reverse Mortgage?

A reverse mortgage is a financial product that allows homeowners to convert a portion of their home equity into cash. It functions as a loan secured by the home, providing funds without requiring monthly mortgage payments. This arrangement lets individuals access their home’s value without selling the property, offering a way to supplement income or cover expenses. The loan balance increases over time as interest and fees accrue against the equity.

Meeting the Age Requirement

To qualify for a reverse mortgage, the primary borrower must typically be at least 62 years old. This age minimum aligns with the loan’s design, which considers the borrower’s life expectancy and expected duration of occupancy. While the federally insured Home Equity Conversion Mortgage (HECM) program requires a minimum age of 62, some proprietary reverse mortgage products may be available to homeowners as young as 55 in certain states.

The age of the youngest borrower on the title significantly influences the amount of funds available through a reverse mortgage. Generally, the older the youngest borrower, the higher the loan amount they may qualify for. This is because the loan amount calculation considers the expected duration of the loan, with older borrowers having a shorter projected loan term. If a borrower’s birthday is within six months of the closing date, the loan proceeds may be based on the age they will turn, potentially increasing the available funds.

Additional Eligibility Criteria

Beyond the age requirement, several other criteria determine eligibility for a reverse mortgage. The property must be the borrower’s primary residence, meaning they live there for the majority of the year. Vacation homes or properties used for income generation, such as farms, generally do not qualify.

Property types eligible for a reverse mortgage often include single-family homes, two-to-four unit properties with one unit owner-occupied, and FHA-approved condominiums or manufactured homes. The homeowner must either own the home outright or have significant equity to qualify. If an existing mortgage remains, the reverse mortgage proceeds are typically used first to pay off that balance.

Financial eligibility also plays a role, focusing on the homeowner’s ability to meet ongoing property obligations. Borrowers must demonstrate they can consistently pay property taxes, homeowner’s insurance premiums, and any applicable homeowner association (HOA) fees. While there is no minimum credit score requirement for a HECM reverse mortgage, lenders conduct a financial assessment of the borrower’s credit history and residual income. This assessment ensures the borrower has sufficient financial resources to cover these mandatory property charges, preventing premature loan default.

Understanding the Application Process

A mandatory requirement is completing a counseling session with a U.S. Department of Housing and Urban Development (HUD)-approved counselor. This session helps borrowers understand the loan’s implications, costs, and alternatives, and must be completed before formal application submission.

Once counseling is complete, borrowers can submit their application to a lender, providing necessary documentation such as identification, homeowner’s insurance policies, and recent property tax bills. An essential part of the process is the home appraisal, conducted by an FHA-approved appraiser. This appraisal determines the home’s market value, which directly impacts the potential loan amount, and verifies that the property meets HUD’s minimum property standards for safety and soundness.

Following the appraisal, the application moves to underwriting, where all submitted documents are reviewed. The underwriter confirms eligibility and may request additional information. This ensures the loan adheres to all regulatory guidelines before final approval and closing.

How Reverse Mortgages Work

The loan proceeds can be received in several flexible ways. Borrowers can choose a lump sum disbursement, a line of credit that allows access to funds as needed, or regular monthly payments, either for a fixed term or for as long as they live in the home. A combination of these options is also possible, allowing homeowners to tailor the payout to their financial needs.

Interest accrues on the outstanding loan balance, and this balance grows over time because no monthly mortgage payments are required. Borrowers retain ownership of their home, meaning the title remains in their name, unlike selling the property.

The loan generally becomes due and payable when the last borrower permanently leaves the home, which can occur if they sell the property, move into a long-term care facility for an extended period, or pass away. Upon a triggering event, the loan is typically repaid from the sale of the home, and any remaining equity goes to the borrower or their heirs. Because most reverse mortgages are non-recourse loans, the borrower or their estate cannot owe more than the home’s value at the time of repayment, even if the loan balance exceeds the sale price.