FAQs

Reverse Mortgage Frequently asked questions:

If a homeowner is not 62 but they are permanently disabled, can they qualify?

• No. The FHA use age as a criteria to determine reverse mortgage eligibility and makes no exceptions for disability or Social Security status.

Can someone qualify if they have a mortgage?

• Yes, as long as they have sufficient equity.  Many homeowners who take out a reverse mortgage use it to pay off their existing mortgage, so they can stop making monthly mortgage payments. (1)

Do all 62-year olds who own their home qualify?

• No. Some homeowners who want to get a reverse mortgage are not eligible because they don’t have enough equity built up in their home. In addition, some home types are not eligible and the borrower must also meet financial eligibility criteria as established by HUD.

What happens if there isn’t enough home equity to qualify?

• This is called a “shortfall.” This means that the reverse mortgage would not provide enough money to pay off the existing mortgage on the home — it is coming up “short.” In this situation, some homeowners may choose to make up the difference by paying down the balance on their mortgage by the amount of the shortfall so that they can qualify for the reverse mortgage. However, most people who want a reverse mortgage and have a shortfall don’t have enough money to do this.

1 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

 

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