What is a Reverse Mortgage?

  • A federal mortgage that is offered by FHA under HUD
  • Available to anyone 62 years of age or older
  • Federally insured by the government, protecting the borrower and heirs
  • The borrower holds Title and continues to own their home
  • It is only repaid once the last borrower “leaves” the home and the heirs inherit the property. The heirs may pay the loan off, either through refinancing the reverse loan and keeping the property or selling it and receive the remaining equity.
  • There is no equity sharing with the lender and the lender does not assume ownership of the property.
  • There are no mortgage payments, but the loan can be prepaid anytime without penalty.
  • Properties that are eligible include, Single-Family residences, Condos and up to 4 Units.   Borrower must occupy one of the units.

An important part of the process of learning about reverse loans, is counseling through a HUD approved counseling agency. The counseling is invaluable for helping anyone to understand the loan program and if a person does decide to apply for the loan, is necessary as part of the application process.

Completing the counseling is not a commitment to apply for the loan, only an excellent opportunity to speak with someone to answer any questions. Upon completion of the counseling, the agency will send a Counseling Certificate to the individual as evidence that it has been completed.

And if the person decides to move forward and apply for the mortgage, the certificate is to be given to the Loan Officer. We have provided a list of approved agencies.

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