Who Is a Good Fit for a Reverse Mortgages?

The Best Candidates for Reverse Mortgages

When you think about mortgage loans, chances are good that you immediately imagine someone embarking on the road to homeownership. However, you already own your home (or are very close to paying off your mortgage). Are you a good fit for a reverse mortgage? Who really benefits from this type of loan?

In the case of an FHA-backed HECM reverse mortgage, you are a good fit if:

  • You owe very little on your mortgage, or your mortgage is completely paid off. This is important, as if you owe too much, you will not be able to qualify for this type of loan. HUD states, “you own the property outright or paid-down a considerable amount”.

  • You do not owe any sort of federal debt. This includes federal income taxes, but also other types of federal debt.

  • You have the ability and means to continue to maintain the property, including paying your property taxes as long as you remain in the home. You must also be able to pay for homeowners insurance, as well as any other fees or costs involved with maintaining the home for as long as you are in it.

  • The property meets HUD/FHA requirements and standards that apply to all FHA-backed mortgage loans.

  • You plan to remain in the home for the rest of your life, using it as your primary residence. Note that this does not eliminate the option of owning a second home or vacation home. You simply need to use the home in question as your primary residence.

  • You are willing to complete a consumer information session/counseling session given by a HUD-approved HECM counselor. Note that everyone who takes out an FHA-backed reverse mortgage must complete a counseling course. Failure to do so will prevent you from obtaining your loan. You can find a brief list of reverse mortgage origination counselors here or research counseling agencies within your zip code here.


If you’d like to learn more, simply fill out the form below and a friendly reverse mortgage specialist will get in touch!