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  • Age-qualified homeowners (62 years or older) who have paid off their mortgages or have smaller mortgage balances remaining are the most likely candidates for the HUD reverse mortgage program.
  • The program allows homeowners to borrow against the equity in their homes and not be required to repay the loan while they continue to live in the home. The amount of the loan does grow over time, as interest on the unpaid balance of the loan accrues on a daily basis.
  • The home does not need to be mortgage free. The best examples are shown when there is at least fifty percent (50%) or more equity in the home relative to the home's FHA appraised value.
  • Homeowners can receive payments in a lump sum, or on a monthly basis (for a fixed term, or for as long as they live in the home, i.e. a lifetime income arrangement referred to as a "tenure" income plan), or on an occasional basis as desired by withdrawing money from the line of credit. It is also popular for borrowers to use a combination of all three payment options to custom fit loan income arrangements to personal circumstances.
  • Homeowners (whose circumstances change… or for any reason at all) can restructure their payment options at any time. A small change fee will apply when requesting the change and will be paid out of the loan structure itself, not requiring the borrower to write a check.
  • Unlike ordinary home equity loans that require payments of principal and interest, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Homeowners need not repay the loan as long as one of the borrowers continues to live in the home, even at the death of a spouse or should one spouse need to move permanently to an extended care facility.
  • The homeowner can never owe more than the home's value. The FHA insurance will pick up any amount due on the loan in excess of the value of the home whenever the loan matures.
  • The home does not have to be sold to pay off the loan. The borrower (or their heirs) can pay off the reverse mortgage and keep the home if they wish.
  • There is no prepayment penalty so the loan can be paid off at any time and all remaining equity in the home stays with the homeowner (or their estate should they pass away).
  • No one person (or any entity) becomes part owner on the deed at any time… only the current homeowner(s) are required to be on title. The home owner can never be forced out of their home.
  • There are however "maturity events" that can trigger repayment under certain circumstances. These maturity events are well spelled out by qualified reverse mortgage advisors (trusted advisors) and the HUD employed counselors.
  • The proceeds from reverse mortgages are tax-free and do not affect Social Security or Medicare benefits. However, the funds received from a reverse mortgage may affect eligibility for certain kinds of government assistance, such as Medicaid or Supplemental Social Security Income, unless the payments are structured with regard to the entitlement program guidelines.