Reverse mortgages stand out as a powerful tool for individuals age 62 and older, allowing them to tap into their home equity without the need for ongoing mortgage payments.  At the forefront of these options is the Home Equity Conversion Mortgage (HECM), a program insured by the Department of Housing and Urban Development (HUD) offering a secure way for seniors to borrow from their equity.

However, the landscape of reverse mortgages extends beyond the HECM, with proprietary reverse mortgage options available for those as young as 55.  These private loans widen the accessibility of reverse mortgages, providing a valuable opportunity for a broader range of homeowners to benefit from the equity they’ve built up in their homes over the years.

Whether considering a HECM or a proprietary reverse mortgage, understanding these prerequisites is your first step towards leveraging your home equity in retirement.

ARLO teaching the minimum age requirements for a reverse mortgage

How Much Can I Receive from a HECM Reverse Mortgage?

Reverse mortgage proceeds can be accessed in a few different ways—as a line of credit, as monthly term or tenure payments, as a lump sum, or some combination of those options—and can be used in whatever way you’d like for groceries, medication, or even utility bills.

The amount of money you can receive from a reverse mortgage depends on a few factors:

  • Your Age
  • Home Value
  • Current Interest Rates

Your age plays a significant role because the older you are, the more money you qualify for when you take out the reverse mortgage.  The amount of money is based on principal limit factors, which give you more money as you age.  For example, if you’re a homeowner who owns your home, check out the examples below.

2024 Reverse Mortgage Eligibility and Benefits by Age

Age of BorrowerPrincipal Limit FactorCurrent Lending Limit
6236.3%$1,149,825
6538.4%$1,149,825
7042.0%$1,149,825
7544.9%$1,149,825
8049.3%$1,149,825
8555.4%$1,149,825
9062.3%$1,149,825
*Principal Limit Factors taken from HUD.gov using an example expected rate of 5.930%. To arrive at your NET principal limit, you must deduct reverse mortgage costs, including upfront insurance (approx. 3%). PLF tables source: https://www.hud.gov/sites/documents/august2017plftables.xls

2024 Proprietary Programs Work at Age 55

Borrowers who are not yet 62 but are 55 and over can also seek a reverse mortgage from one of the “Jumbo” or “Proprietary Programs” available.  HUD does not insure private programs, so no mortgage insurance is required.

The requirements and property eligibility criteria can be different but very similar, and borrowers who want to get their 62nd birthday immediately can always investigate one of the private programs to determine if it will meet their needs.

Proprietary Reverse Mortgage Loan-to-values (LTV) from Age 55

Borrower AgeLoan-to-valueLoan-to-valueLoan-to-value
Rate 9.375%9.990%9.740%
5521.5%29.5%29.5%
6023.0%31.0%31.0%
6524.7%32.7%32.7%
7027.6%35.6%35.6%
7532.1%40.1%40.1%
8037.0%45.0%45.0%
8542.8%50.8%50.8%
9043.4%51.4%51.4%
LTV Tables as of: 09/07/2023
Available Payout: Lump Sum
*Divide your home value by the LTV percentage to calculate your loan amount.
E.g., $2,000,000 value, age 70 = 35.6% LTV or $712,000 loan amount.

Which Program Should I Choose?

There are a couple of different HECM programs to choose from: fixed rate and adjustable, lump sum distributions, and monthly payments or lines of credit from which the borrower can draw as needed/desired.  What is right or best is what is right or best for the borrowers’ circumstances.  The fixed-rate loan seems attractive to many borrowers, but there are several downfalls borrowers must consider.

Namely, fixed rates require a full draw of all sums available.  If you do not need all the money to pay off existing liens, HUD requirements on their program only allow a portion of the line to be accessed in the first 12 months and on a fixed rate loan with no subsequent draws available, any amount not available in the initial draw is lost to the borrower.

Also, since fixed rates are often higher than adjustable rates and interest rates determine how much money a borrower will receive, adjustable-rate borrowers often receive higher benefits in today’s interest-rate environment.

Finally, the adjustable program gives borrowers more options regarding how they will receive their funds (remember, with the fixed rate, the only option is a one-time full draw of all funds available).  Borrowers who choose an adjustable-rate loan have several options for receiving their loan proceeds, including a line of credit, monthly payments, or even a lump sum.

The funds in the line of credit grow annually at the same rate as the interest accrual rate plus the MIP accrual rate on the unused portion.  This is not interest you are earning but relatively greater borrowing power later as the growth amount increases the available line.

You only owe what you borrow and accrue interest on the outstanding balance, so having the additional money available costs you nothing and only needs to be repaid later if you draw and use those funds.

Age FAQs

Q.

What is the minimum age for a HECM Reverse Mortgage?

HUD has established the minimum age for a HECM reverse mortgage borrower to be 62 by the time the loan closes.
Q.

What is the minimum age for a Jumbo Reverse Mortgage?

Generally, jumbo programs also use a 62-year-old minimum age, but several programs are now available for borrowers down to 55 years of age.
Q.

I am 71, and my wife is 69. Would it benefit us to wait 6 months until my wife turns 70 before we get our reverse mortgage?

It is true that the older you are, the more you receive with a reverse mortgage, but there are two things borrowers need to remember when strategizing over whether to wait for the next birthday to apply for the loan.  Firstly, if you are within 6 months of your next birthday when you are ready to close the loan, you get the benefit of the next higher age anyway.  Also, one of the factors that determines the amount of money you receive in a reverse mortgage is the interest rate.  When rates are declining or below the HUD floor of 3%, waiting for the next birthday doesn’t adversely affect you.  However, when rates rise, you can quickly lose much more from a higher rate than the little you gain from the next age level if the interest rates increase before you lock in your expected rate.  If the rates go down, you can float down one time at loan documents, but if they continue to rise, borrowers often lose far more money from increasing rates than they ever would have gained from the following age benefit.
Q.

Is there any age limitation to getting a reverse mortgage?

To get a reverse mortgage, borrowers must be at least 62 years of age for the HUD HECM program, and there are programs available down to age 55 on the jumbo or private reverse mortgage programs.
Q.

Can you outlive a reverse mortgage?

Drawing all available funds, you can outlive the benefits under a reverse mortgage.  Still, you can live in the home mortgage-payment-free for as long as you continue to pay the taxes, insurance, and property charges, even after your available funds are gone.  The earlier you take the loan, the longer your balance will accrue interest.  While it’s not required, you can make payments—even if it’s just on the interest—on your reverse mortgage throughout the loan term.
Q.

Can I get a reverse mortgage if my daughter (Co-owner of the house) is not yet 62?

Yes, you can, but you need to know there are possible repercussions for doing so with an underaged co-owner who is not a spouse.  Your daughter would be considered a non-eligible, non-borrowing co-owner of the home.  Before HUD’s final rule in 2017, this distinction didn’t even exist.  Before then, any co-owners who were not eligible for the loan were forced to Deed off the title for the reverse mortgage to go through.  Now, they can remain on title but are still not on the loan and must agree to the loan terms.  The loan terms state that when the time comes that you, the eligible borrower, are no longer living in the home as your primary residence, the loan becomes due and payable.  This means the loan becomes due and payable when you pass or must move out of the home permanently.  Your daughter would be forced to repay the entire balance owed at that time, sell the home, or face foreclosure.
Q.

Can your heirs join you in a reverse mortgage if they meet the age requirement?

Yes, if your heirs are 62 years or older, are listed as owners on the property title, and reside in the home, they can be included in the reverse mortgage alongside you.  It’s not necessary for them to be your spouse to qualify.  However, once a reverse mortgage is in place, you cannot add new individuals to the existing loan agreement.
Q.

Is it possible to obtain a reverse mortgage if I have less than 50% equity in my home?

Yes, the 50% equity figure is a general guideline, and your actual eligibility may vary based on your age.  Reverse mortgage benefits increase with the borrower’s age, meaning the older you are, the more you might qualify for.  This is because reverse mortgages do not require payments during your lifetime, and lenders consider your age to determine how much of your home’s value you can borrow against.  Essentially, the thinking is that younger borrowers, starting at 62, will likely accumulate more interest over time if they maintain the loan until their passing, compared to older borrowers, say at 82.  The HUD guidelines incorporate these age-related factors when calculating the loan amounts you might be eligible for.
Q.

In Texas, do both applicants for a reverse mortgage need to be at least 62 years old?

Indeed, they do.  In Texas, every applicant for a reverse mortgage, including married couples, must be 62 or older.  This requirement applies to all spouses involved.
Q.

My spouse and I are 62, but his name is not on the mortgage.  If I died before him, would he be allowed to stay in the home with the reverse mortgage?

You would execute a Grant Deed from yourself to yourself and your spouse and close the loan in both your names, making you both eligible to remain in the home after the other passed or left (as in to live in hospice care should that become necessary).  If you choose to keep the property as separate property (yours alone), he would be an ineligible spouse.  As an ineligible spouse, the loan would become due and payable when you no longer live in the property as your primary residence (whether due to death or any other reason).  He would still need to participate in the loan in some ways, acknowledging that he was aware of the loan, that he was not a borrower, and that the loan became due and payable when you no longer lived in the home as your primary residence but he would not sign the legal documents.  Depending on your plans for the property title, there may be no benefit to keeping him off the title when one of you passes, but that depends on your circumstances and goals.  I suggest you both discuss it and check with your family attorney.
How Age Affects Reverse Mortgages

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