Reverse Mortgage Age Requirements for 2021

December 2, 2020 By Michael G. Branson 21 comments

If you meet the reverse mortgage age requirement of 62 years, you could be a candidate for the federally-insured Home Equity Conversion Mortgage (HECM) program.

The loan can enable you to remain in your home longer and does not need to be repaid for as long as you maintain principal residency in your home and keep up with property taxes and insurance.

Because the length of the loan depends directly on how long you live in the home, the amount you can borrow also depends on that time frame, including the age at which you get the 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.

Borrowers must pay an upfront mortgage insurance premium along with annual mortgage insurance of 0.5% of the outstanding loan balance annually.

Proprietary Programs Work at Age 60

Borrowers who are not yet 62 but are 60 and over can also choose to seek a reverse mortgage from one of the “Jumbo” or “Proprietary Programs” available.

The private programs are not insured by HUD and therefore there is no mortgage insurance required.

The requirements and property eligibility criteria can be different but are very similar and borrowers who feel they do not want to wait for their 62^nd birthday can always investigate one of the private programs to determine if it will meet their needs.

How Much Can I Receive from a Reverse Mortgage?

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

your age
home value
current interest rates and fees.

Your age plays a large role, because the older you are the more money you will qualify when you take out the reverse mortgage.

The amount of money is based on principal limit factors, which provide you with more money as you get older.

For example, if you’re a homeowner who owns your home, check out the examples below.

2021's Reverse Mortgage Principal Limit Factors

Age of Borrower	Principal Limit Factor	Current Lending Limit
62	52.4%	$822,375
65	54.2%	$822,375
70	57.6%	$822,375
75	60.9%	$822,375
80	64.2%	$822,375
85	68.5%	$822,375
90	73.0%	$822,375

*Principal Limit Factors taken from HUD.gov using example expected rate of 3.00%. You must deduct reverse mortgage costs including upfront insurance (approx. 3%) to arrive at your NET principal limit.
PLF tables source: https://www.hud.gov/sites/documents/august2017plftables.xls

Which Program Should I Choose?

There are a couple of different HECM programs to choose from, including fixed rate and adjustable; lump sum distributions and monthly payments or lines of credits from which the borrower can draw as needed/desired.

What is right or best is what is right or best for the borrowers’ individual 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 the adjustable rates and since interest rates are one of the determining factors as to how much money a borrower will receive, adjustable rate borrowers most often receive higher benefits in today’s interest rate environment.

Finally, the adjustable program gives borrowers more options as to 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 of how to receive their loan proceeds, including a line of credit, monthly payments, or even a lump sum.

The funds still 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 rather greater borrowing power later as the available line is increased by the growth amount.

You only owe what you borrow and you only accrue interest on the outstanding balance so just having the additional money available costs you nothing and does not need to be repaid later unless you actually draw and used those funds.

Age FAQs

What is the minimum age for a Reverse Mortgage?

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

What is the minimum age for a Jumbo Reverse Mortgage?

Generally, jumbo programs also use a 62-year-old minimum age but there are also several programs now available for borrowers down to 60 years of age.

Can my spouse under the age of 62 be protected?

The HUD HECM allows for an “eligible non-borrowing spouse” under the age of 62 that, although they cannot access the reverse mortgage funds if the eligible borrower were to leave the home, they can remain in the home for life by following the same reverse mortgage provisions (live in the home as their primary residence, pay the taxes, insurance and any other property charges in a timely manner and also maintain the home in a reasonable manner).

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 60 on the jumbo or private reverse mortgage programs.

Can you outlive a reverse mortgage?

You can outlive the benefits available under a reverse mortgage if you draw all available funds, but you can live in the home payment free for life as long as you continue to pay the taxes, insurance and any property charges even after your available funds are gone.

The earlier you take the loan out, the longer your balance will accrue interest.

While it’s not required, you do have the option of making payments—even if it’s just on the interest—on your reverse mortgage throughout the term of the loan.

If you’re considering a reverse mortgage and have questions about what kind of loan to take out, or how it may vary depending on your age, don’t hesitate to call us Toll Free 800-565-1722 and find out more. We’re here to help!

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About the Author, Michael G. Branson | Mike@allreverse.com

Michael G. Branson CEO, All Reverse Mortgage, Inc. and moderator of ARLO™ has 40 years of experience in the mortgage banking industry. He has devoted the past 16 years to reverse mortgages exclusively.

21 Comments on this Article

Walter B.
January 20th, 2021

In the. State of Texas do both applicants have to be 62 or older?
Reply to Walter
- ARLO™
  January 20th, 2021
  
  Hello Walter,
  
  Yes they do. All married Texas applicants must be 62 years of age or older and that includes spouses.
  Reply to ARLO
Jill E.
December 28th, 2020

I am 57 and my only income is widow survivorship SS. My house is completely paid off. Can I do a reverse mortgage to help with my income?
Reply to Jill
- ARLO™
  December 28th, 2020
  
  Hello Jill,
  I am sorry, but the minimum age for the HUD Home Equity Conversion Mortgage (HECM) is 62 and for some proprietary or private programs, 60. I am not aware or any reverse mortgage programs that go down to age 57.
  However, we are not experts on other possible programs that may be available in your area. I would suggest you start by checking with groups like AARP and HUD approved counselors to see what may be available.
  Reply to ARLO
Vicki C.
September 14th, 2020

Can I get a reverse mortgage with less than 50% equity in my home?
Reply to Vicki
- ARLO™
  September 14th, 2020
  
  Hello Vicki,
  
  50% is a guideline and depending on your age, you may receive a higher benefit.
  The older you are, the higher the benefit you receive on the reverse mortgage programs.
  Since the loan has no payments for life, the loan takes age into consideration for the percentage of value it will allow for borrowers.
  After all, statistically speaking, borrowers who are 62 years of age are most likely able to accrue more interest over a lifetime if they keep their loan until they pass than borrowers who are 82.
  The HUD tables take these statistics into consideration when determining available loan amounts.
  Reply to ARLO
Jackie
September 4th, 2020

Can your heirs go on the reverse mortgage with you if they are old enough?
Reply to Jackie
- ARLO™
  September 4th, 2020
  
  Hi Jackie,
  
  Anyone who is of qualifying age (62 and over), is on title to the property and lives in the home may also go on the reverse mortgage.
  They do not need to be your spouse under those circumstances. You cannot add them to the mortgage loan as you cannot add a new person to any existing loan.
  Reply to ARLO
Art A.
August 14th, 2020

Hello ARLO, I have been researching reverse mortgages a lot as an option to supplement retirement income. While I am only 43 right now, it seems as if the best possible solution with this is to obtain a reverse mortgage line of credit at age 62, and then only use it if/when necessary. Do I have to speak to a counselor now since I have additional questions, or would you be able to answer some questions that I may have regarding a reverse mortgage? Please let me know. Thanks.
Reply to Art
- ARLO™
  August 14th, 2020
  
  Hello Art,
  
  While I admire your advance planning, I think you may be a bit premature on any detailed questions. The program is subject to changes as HUD deems needed and has changed radically at times over the past 6 years.
  I really cannot tell you what it might look like in 19 years and any information you receive now may not be worth the time it took to gather. The advice I give you today may not be the same as the advice I would give you at that time based on current HUD program parameters, rates, and options available.
  We have had entire programs come and go over the past 19 years and there is no way to know if that will be the case again over the next 19 so my advice would be to keep an eye on the program and keep it in mind as one of your available options but start to really drill down on program availability as soon as you get within about 6 months of eligibility and you know what you really have to work with and if it is a viable program for you given your circumstances at that time.
  Reply to ARLO
JR
June 10th, 2020

What percentage of the appraisal value would the reverse mortgage lender disburse, so that the existing mortgage can be paid off and the remainder be given to the mortgagee?
Reply to JR
- ARLO™
  June 10th, 2020
  
  Hello JR,
  
  HUD limits the amount of the initial draw borrowers may receive on their reverse mortgage to 60% of their available loan amount, unless the funds are going toward paying off what HUD refers to as "property charges" (seasoned liens against the property and the costs of the new loan) and then up to the full loan amount (100%) may be used immediately.
  If you need more than 60% but not the full 100% just for the property charges, you may pay off qualifying charges and take up to 10% cash for yourself, again up to 100% of your Principal Limit. HUD will not allow you to pay off a line of credit or cash out refinance loan that you received less than 12 months ago to this limit though, you would be capped at 60% of the available loan amount for this purpose.
  
  Let us do a couple of examples to show you what this means. For ease of explanation, let us use a Principal Limit (loan amount) of $100,000. If you had no loans on the property, HUD would allow you to take up to $60,000 at closing (minus any costs) or in the first 12 months and then you would be required to wait for the end of 12 months before you would have access to the remaining $40,000.
  
  But now let us assume that you need 60% or more of your available loan just to pay off an existing loan plus the costs of the new loan. Under this scenario, let us assume the balance of your old loan and the costs of your reverse mortgage alone would require $80,000 at the closing.
  HUD parameters would allow you to pay off the entire $80,000, take an additional 10% of your principal limit or $10,000 in cash if you desire but then you must wait for the end of 12 months before you would have access to the remaining funds. If your loan plus costs would require use of $90,000 of your available loan, you would have access to the last 10% at closing if you wished based on this formula.
  
  Those rules refer to the percentage of the loan amount that can be accessed. As far as the percentage of the appraised value, that number changes with the HUD calculator.
  The percentage of the home's value that is available to borrowers which determines the loan amount or Principal Limit to begin with is a calculation that varies depending on the youngest borrower's age, interest rates and HUD's current program parameters that do change from time to time.
  At this time interest rates are very low so most borrowers are receiving the most money the program will allow for their age bracket but if rates should rise, that would lower the amount as a percentage of the home's value available to borrowers under the program.
  To determine what would be available to you based on your age and the age of your spouse (if any), I would suggest that you visit our online calculator.
  This calculator has instant access to local costs and so not only will it tell you what you can expect for your age(s), but also the costs for your area as they do vary around the country. Give the calculator a try, it is quick, easy and there will be no hassle or obligation.
  Reply to ARLO
Linda S.
June 2nd, 2020

My daughter and I are on the mortgage and I am 70. Can I get a reverse mortgage?
Reply to Linda
- ARLO™
  June 2nd, 2020
  
  Hi Linda,
  
  You could refinance into a reverse mortgage but your daughter would need to approve the terms which would allow the loan to be due and payable if for any reason the home is no longer your primary residence since she is not yet 62 and would not be a borrower on the reverse mortgage.
  The means that when you pass or move to assisted living, the loan would become due and your daughter would be required to pay the loan off at that time. That might mean she would need to refinance the loan, sell the property, or pay it off with other funds available to her.
  If she were unable to do so at that time, the lender would eventually begin a foreclosure. For this reason, I would not advise a reverse mortgage in just your name now if your daughter does not have plans or ability to pay off the loan or move when the time comes that the loan must be repaid.
  Reply to ARLO
Tim
May 26th, 2020

Why does Arlo reflect that on my home valued at $1,196,000 I can borrow only $554,000 when the age factor on an HECM would allow me (us) to borrow over $660,000 for a 73 yr-old with 72-yr old spouse? I do not want a jumbo reverse mortgage from a third party lender but an FHA backed HECM which has a new limit of $765,000.

Please respond...call if you wish but know that I am a banker, have been a mortgage warehousers, understand the product...I want to refi my home now while rates are low.
Reply to Tim
- ARLO™
  June 2nd, 2020
  
  Hi Tim,
  
  HUD's Principal Limit Factor for a 72-year-old borrower at the floor rate (the lowest rate at which the borrower will receive the maximum amount of money) is 58.8%. But you need to remember, HUD uses the property value or the HUD maximum lending limit, whichever is less, to determine the Principal Limit for which you would be eligible.
  In your case, you would be eligible for 58.8% of the lower current lending limit of $765,600, not the property value. This would mean a Principal Lending Limit or maximum loan amount before costs of $450,172.80.
  Sometimes a slightly higher margin will actually allow a lender to pay some of the costs which include all or some of the HUD initial MIP so it is wise to look at both the margin that takes the loan all the way to the floor rate of or around 3% and also one that might be just a little over but pays some or all of the costs and starts the loan balance including the costs lower.
  
  Either way though, you could not get to a loan amount of $554,000 available to you before costs on the HUD HECM program at your ages. If you look at the latest HUD principal limit factor tables (available here), you will see that $554,000 or roughly 72.4% of $765,600 is not attainable until borrowers reach the age of 90 at which time the Principal Limit factor is 73% (89 is close at 72.1%). If the lower amount of $450,172.80 would meet your needs, then you could certainly stay with the HUD HECM program.
  If it is insufficient to meet your needs, your only option would be to consider the proprietary or private programs if you still desire a reverse mortgage. If you do need more than that just to pay off your current mortgage, then you would be using all or most of the funds just to retire your existing mortgage and then you need to determine what your concerns are with the private program if all or most of the funds are drawn from the inception.
  Either way, only you can determine if the program is right for you, but HUD will definitely stop at $450,172.80 or below, depending on the interest rate.
  Reply to ARLO
Denise D.
February 21st, 2020

I am 56 years old and I own my home and I'm the sole owner of the home on the deed. I have no mortgage and want to know if I am eligible for a reverse mortgage?
Reply to Denise
- ARLO™
  February 21st, 2020
  
  Hello Denise,
  
  The HUD/FHA federally insured reverse mortgage requires borrowers to be a minimum of 62 year of age to be eligible for the program.
  Proprietary or private programs currently will accept borrowers to a minimum age of 60 but I am not aware of any programs that will do the loan for a 56-year-old borrower.
  Perhaps you can use some sort of interim financing (possibly even family funded) to carry you through the next 4 to 6 years? If not, you could also investigate a home equity line of credit (HELOC) or other traditional loans.
  But remember, you are required to make monthly payments with the HELOC and other loans that failure to do so can affect your credit or even result in foreclosure.
  Reply to ARLO
- John
  May 19th, 2020
  
  Hi, we are 61 years old and have a great deal of equity in our house. Could you recommend and products that might help us use some of our equity?
  Reply to John
  - ARLO™
    May 19th, 2020
    
    Hello John,
    
    The reverse mortgage requires you to be a minimum of 62 years of age to close the loan (you can apply up to 60 days before your 62 birthday). If you wait until that time, there are several reverse mortgage programs available.
    If you look at other programs in the meantime, as long as you do not exceed 60% of your available reverse mortgage proceeds for the payoff of those loans, you can still pay them off with a reverse mortgage when you turn 62 but if you need more than 60% of your available proceeds just to pay off a lien that is less than 1 year old (and in the case of a home equity loan since you withdrew funds), the reverse mortgage will not pay off the new loan or withdrawals beyond that 60% threshold.
    
    To determine what that amount would be, I would encourage you to visit our online calculator at and put in your information. For the time being, use a birth date that would make you exactly 62, your property address (or at least the correct zip code so the fees are accurate) and the calculator will determine what is available to you at this time.
    If it shows that after payoff of any loans of record you have $100,000 available to you at closing or in the first year, remember that if you exceed $100,000 on any other interim financing and intend to still pursue a reverse mortgage when you do turn 62, the loan will not pay off any loans that exceed this amount even though you would have more money available to you after 12 months.
    
    The other thing I would caution you is that property value must be substantiated by appraisal, HUD can change their program parameters and interest rates are subject to change. All three could affect the amount of money available to you under the program.
    If you do plan to do some sort of interim financing and repay it with a reverse mortgage when you turn 62, I would caution you not to cut the amount too close to what you think you can get at that time and then find out that circumstances have changed and you cannot get as much money as you expected.
    It would certainly be best to wait until you turn 62 if the reverse mortgage is your ultimate plan and just do the loan then unless you are extremely comfortable with any payments the line of credit carries should circumstances change and you need to make them for a long time.
    Reply to ARLO
Richard
April 24th, 2013

Homeowner's age is an important factor in how much he is allowed to borrow. Lenders use the age of the youngest owner to help determine the maximum loan amount. Lenders also consider the present interest rates and fees, along with the home's appraised value, to determine the loan amount.
Reply to Richard

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