Who’s Eligible?
A reverse mortgage is a unique financial tool, with specific eligibility requirements. Review the following reverse mortgage rules to see if you may be eligible.
Individual Reverse Mortgage Rules
- Age: All borrowers on the title must be age 62 or older. Underage or non-borrowing spouses are permitted under special rules.
- Financial Assessment: Basic documentation of income, debt, savings, and credit history are required to determine if the reverse mortgage would provide a sustainable long-term solution for the borrowers.
- Occupancy: The property must be the primary residence of the borrower(s).
- Existing liens: Any current liens (mortgage, home equity line of credit, or other liens) secured by the property must be paid at the time of settlement. Remaining proceeds less loan closing costs are the net funds available to the borrowers.
- Consumer counseling: As an additional safeguard, the Department of Housing and Urban Development (HUD) requires that each prospective reverse mortgage borrower receive counseling provided by an independent HUD-approved counseling agency. No appraisal or title services can be ordered unless the counseling certificate has been issued.
Property Requirements
The property must be the principal residence of the borrower(s). Second homes or investment properties are not eligible. Eligible property types may include:
- Single-family residences
- 1-4 unit multi-family properties
- Condominiums (approved by FHA)
- Planned Unit Developments (PUD)
- Manufactured homes (that meet HUD/FHA requirements)
