How Old Do You Need to Be to Get a Reverse Mortgage?

A reverse mortgage is a financial product for homeowners that converts home equity into cash. Unlike traditional mortgages, it requires no monthly payments. The loan balance grows, with repayment deferred until the borrower no longer lives in the home, sells, or passes away. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM), protecting both lenders and borrowers.

Age Requirements for Reverse Mortgages

The minimum age requirement for obtaining an FHA-insured Home Equity Conversion Mortgage (HECM) is 62 years old. This age applies to the youngest borrower on the loan. If there are multiple borrowers, the age of the youngest individual is used to determine the amount of equity that can be accessed.

While 62 is the federally mandated minimum, the amount of available equity generally increases with the age of the youngest borrower. This is because older homeowners are typically projected to have a shorter loan term, which influences the principal limit factor used in calculating loan proceeds. Consequently, an older borrower may qualify for a larger loan amount compared to a younger borrower with the same home value.

Essential Eligibility Factors

Beyond the age requirement, other factors determine eligibility for a reverse mortgage. The property must be the borrower’s principal residence. Eligible property types include single-family homes, 2-4 unit properties (one occupied by borrower), FHA-approved condominiums, and manufactured homes that meet FHA requirements. The home must be in good condition; significant repairs identified during inspection may need to be completed before loan approval.

Homeowners must possess substantial equity, often requiring them to own the home outright or have a low existing mortgage balance payable at closing with the reverse mortgage proceeds. Lenders conduct a financial assessment to ensure the borrower can meet ongoing property-related obligations, including paying property taxes, homeowner’s insurance premiums, and any applicable homeowner’s association (HOA) fees, as well as maintaining the property.

Before applying, borrowers are required to complete a counseling session with an independent, HUD-approved reverse mortgage counselor. This counseling educates borrowers on the features, costs, benefits, and potential drawbacks of a reverse mortgage, ensuring an informed decision. The session also covers alternative financial solutions and helps borrowers understand their responsibilities.

The Reverse Mortgage Application Process

After meeting initial eligibility and mandatory counseling, the formal application process begins. The first step involves selecting a reputable lender, as only FHA-approved lenders can offer HECMs. Borrowers will then submit various documents to the chosen lender, including proof of identity and age (e.g., driver’s license or passport), their Social Security card, and documentation confirming property ownership (e.g., deed or recent mortgage statements).

Lenders will also request financial information, including recent bank statements, income verification (like pay stubs or Social Security award letters), and, if applicable, tax returns. A property appraisal is ordered to determine the home’s current market value, a key factor in calculating the loan amount, and to verify the home meets HUD property standards.

The application then moves into the underwriting phase, where the lender thoroughly reviews all submitted documentation and appraisal results. Underwriting ensures all requirements are met and the loan complies with federal regulations. If approved, loan proceeds are disbursed according to the borrower’s chosen payment method: a lump sum, monthly payments, a line of credit, or a combination. Finally, closing involves signing legal documents, similar to a traditional mortgage closing, at a title company or other convenient location.

Ongoing Borrower Responsibilities

Borrowers retain home ownership but must meet ongoing responsibilities to keep the loan in good standing. A primary obligation is to maintain the property as the principal residence. Extended absences (over 12 months for non-medical reasons) can cause the loan to become due.

Borrowers must keep property taxes and homeowner’s insurance current. Failure to pay can lead to the loan becoming due, potentially resulting in foreclosure. Regular property maintenance is another ongoing responsibility, ensuring the home remains in good condition and meets FHA standards.

The reverse mortgage loan becomes due when the last surviving borrower dies, sells the home, or permanently moves out. If the borrower fails to meet any ongoing loan terms, such as paying taxes or insurance, the loan can also become due. The loan balance, including accrued interest and fees, must then be repaid, typically through the sale of the home, by the borrower’s heirs, or by refinancing.