Top 30 Reverse Mortgage Facts.

Some of these reverse mortgage facts may surprise you.  It is common that when we talk about reverse mortgage loans with people, they often don’t know a lot about them.   We are happy to share these with you in hopes that it will answer some of your questions.

Most, but not all, reverse mortgages today are federally insured through the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) Program. This advertisement talks about HECM loans only.


  1. Did you know that the reverse mortgage loan is also known as a Home Equity Conversion Mortgage or HECM?


  1. The reverse mortgage loan is no longer considered a loan of last resort.


  1. There are over 10.6 Trillion dollars of untapped home equity in Baby Boomers’ homes.


  1. Reverse Mortgages have an 83% satisfaction rating for borrowers who have a reverse mortgage loan according to a study done by Ohio State University.


  1. You could qualify for a reverse mortgage loan even if you own your current home free and clear.


  1. As long as all loan terms are met, borrowers still own their home when they have a reverse mortgage.


  1. A Home Equity Conversion Mortgage has been around for over 30 years.


  1. President Ronald Reagan signed the HECM reverse mortgage loan into law in 1988. The FHA insured Home Equity Conversion Mortgage (HECM) was signed into law on 2/5/1988, as part of the Housing and Community Development Act of 1987.


  1. A house with a reverse mortgage loan can still be inherited when the borrowers permanently move out.


  1. Inheriting a property with multiple stakeholders can make the inheritance more complicated.


  1. The servicer of a reverse mortgage does not automatically own or take the house when the last surviving borrower leaves home or dies. When the last surviving borrower permanently leaves home, either by moving out or passing away, the loan becomes repayable, along with interest which is agreed upon at the beginning.


  1. A reverse mortgage loan is a non-recourse loan. If the loan balance exceeds the home value, HUD/FHA makes up the difference to the investor when the loan is due.


  1. A Reverse Mortgage Line of Credit has a growth feature (applies to unused funds).


  1. The age to qualify for a reverse mortgage loan is 62 or older.


  1. With a reverse mortgage, as long as all loan terms* continue to be met, the non-borrowing spouse can still live in the home should the borrower predecease them. *Terms include living in the house as your primary residence, maintaining the home, and paying home expenses such as taxes and insurance.


  1. Mortgage insurance is built into every reverse mortgage loan.


  1. The Reverse Mortgage Stabilization Act was implemented in 2013.


  1. Borrowers can escrow the taxes and insurance over the life of the reverse mortgage through a Life Expectancy Set-Aside (LESA).


  1. Qualifying for a reverse mortgage loan does not include a specific credit score. (However, minimal credit, income and property qualifications do apply.)


  1. The borrower, or their heirs if applicable, has up to one year to satisfy the reverse mortgage loan balance when the last surviving borrower permanently leaves the home.


  1. There are a variety of ways you can use a reverse mortgage loan to fit your specific needs and wants including lump sum, a line of credit, and monthly cash flow payments.


  1. Your heirs are still entitled to the remaining equity balance, if any, after the loan has been paid off. If your heirs want to purchase the home they can by paying 95% of the appraised value or paying off the loan balance, whichever is less.  Note: this does not constitute legal advice. Please consult an attorney for your specific situation.


  1. As long as all loan terms are met, a reverse mortgage is not due until a borrower no longer occupies the home or turns 150 years old.


  1. All borrowers must get HUD-approved counseling prior to getting a reverse mortgage loan.


  1. The maximum claim amount on a HECM reverse mortgage loan is now $970,800, in 2022.


  1. The proceeds from a HECM can be used to pay for Long Term Care.


  1. Accessing a portion of your home equity with a reverse mortgage loan early on could potentially allow all of your investments to last longer. (Note: this does not constitute financial advice. Please consult a financial advisor for your specific situation.)


  1. The proceeds from a reverse mortgage loan can be used to help divide assets in a divorce. (This does not constitute legal advice. Please consult an attorney for your specific situation.)


  1. Some areas may have access to a proprietary Jumbo Reverse Mortgage. (These reverse mortgage loans are not-HECM loans.)


  1. Your current mortgage can be refinanced into an FHA Reverse Mortgage.



You can buy a new home using a reverse mortgage loan for Purchase*.  The required down payment on your new home is determined on a number of factors, including your age (or eligible non-borrowing spouse’s age, if applicable); current interest rates; and the lesser of the home’s appraised value or purchase price.

It’s important to know all the facts and features of a loan before approaching a lender or a bank.  If you have questions about whether or not a reverse mortgage loan is right for you, it never hurts to do a little research, or ask our team for a local reverse mortgage professional or CRMP in your area.