Reverse Mortgage Income Requirements in 2025
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Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 20 years to reverse mortgages exclusively. (License: NMLS# 14040) |
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All Reverse Mortgage's editing process includes rigorous fact-checking led by industry experts to ensure all content is accurate and current. This article has been reviewed, edited, and fact-checked by Cliff Auerswald, President and co-creator of ARLO™. (License: NMLS# 14041) |
Understanding Reverse Mortgage Income Requirements
Welcome to our 2025 guide on reverse mortgage income requirements. This article explains the financial assessment underwriting guidelines, specifically the minimum residual income requirements established by HUD.
These requirements play a crucial role in the lender’s application process, ensuring that you, as a borrower, can comfortably manage ongoing property-related expenses, such as property taxes, homeowners insurance, and maintenance costs, after securing a reverse mortgage.
We will provide clear, easy-to-follow tables that detail the minimum residual income needed based on your family size and the region of the United States where you reside. Additionally, we will clarify what types of income lenders consider acceptable.
2025 Regional Residual Income Requirements
Family Size | Northeast | Midwest | South | West |
---|---|---|---|---|
1 | $540 | $529 | $529 | $589 |
2 | $906 | $886 | $886 | $998 |
3 | $946 | $927 | $927 | $1,031 |
4 or more | $1,066 | $1,041 | $1,041 | $1,160 |
Eligible Income Sources for Reverse Mortgage
Income Source | Description | Required Documentation |
---|---|---|
Employment Income | Traditional income earned from an employer; lender typically verifies a 2-year history. | IRS Form W-2 (past 2 years); Recent pay stubs (last 30 days); Employer verification (e.g., HR statement) |
Non-Borrowing Spouse / Household Member | Income from someone living in the home but not on the loan. Not counted as qualifying income, but can help present a fuller financial picture. | Social Security number of the individual; Same employment docs as above, if applicable |
Part-Time Employment | Less than 40 hours/week; generally must be held for 2+ years and likely to continue. Income may be averaged if wages vary. | W-2s (past 2 years); Recent pay stubs; Employer confirmation of ongoing status |
Overtime & Bonus | Compensation above base pay. Must be received consistently for 2+ years and likely to continue. | Pay stubs or W-2s reflecting overtime/bonus history; Employer confirmation of likelihood to continue |
Seasonal Employment | Recurring, seasonal work earned for at least the last 2 years; should be reasonably expected to continue next season. | W-2s and/or pay stubs covering seasonal periods; Employer confirmation of expected return |
Accessory Dwelling Unit (ADU) Rental | Rental income from a smaller unit on the property; must be supportable by market evidence. | Market rent analysis/forms requested by lender; Current or future rental agreements (if available) |
Employment income — This is the most traditional type of income. It’s the income you earn through working for an employer.
Documentation — Your lender will request your IRS Form W-2, which should document your income on a calendar-year basis. The lender must verify two years of employment and income, along with supporting documentation. You will also need pay stubs for at least the most recent 30 days and one additional form of employment verification, such as a statement from your employer. (Some alternative forms of documentation may apply.)
Non-borrowing spouse or other household member income — If you are obtaining a reverse mortgage, your spouse will not be named on the loan. However, if someone lives in your home but does not own it and will not be named on the loan, their income may also be considered for the purposes of qualification. It’s not considered income for the lender’s assessment, but it’s worth mentioning and documenting in case it helps provide a more accurate picture of your finances.
Documentation — You’ll need to provide the Social Security number of the person whose income you’re including and the documentation required for your employment income.
Part-time employment income — Generally covers less than 40 hours per week. It counts toward your income under the financial assessment if you have had the job for at least two years and are likely to continue in the job. If your wages have changed, your lender will average your wages over time.
Overtime and bonus income — Additional income that falls outside your average salary in the form of overtime or bonuses. The lender must verify that it has been received for at least the past two years and is likely to continue.
Seasonal employment income — This type of income is typically earned on a seasonal basis, rather than on a year-round basis. Again, it must have been earned for at least the last two years and is reasonably likely to continue the following season.
Accessory Dwelling Unit (ADU) — A smaller housing unit on a property, often called an ADU, can bring in rental income. If you want to use this rental money to help qualify, the underwriter must check how much you can earn from your ADU. The lender will request specific forms that demonstrate the typical rent prices in the area. If you already have future rental agreements, the bank may also want to review them.
Additional Income Types
There are other types of income and benefits that the lender will consider, which are worth noting.
These include things like:
- Employer housing subsidy
- Income from employment from a family-owned business
- Self-employment income
- Commission income
- Rental income
- Disability benefits
- Pension or retirement benefits
- Annuity income
- VA benefits
- Social Security
- Disability
- Workman’s compensation
- Public assistance
- Interest, dividend, and trust income
Comparing Income Requirements: Reverse Mortgages vs. Other Loan Types
Loan Type | Income Needed | Credit Score | Debt Limits | Job Proof |
---|---|---|---|---|
Reverse Mortgage | Just a little—covers taxes & insurance | No minimum needed | Not a big deal | Usually not |
Traditional Loan | Strict—needs steady pay | High score for best rates | Under 43% of income | Yes |
HELOC | Some—plus home value | Good score helps | Easier than traditional | Usually yes |
Personal Loan | Depends—score matters | Better score, better deal | Depends—often key | Often yes |
Wondering If Your Income Qualifies? Get a free quote with expert help from All Reverse Mortgage—America’s #1 with a 4.99/5-star rating! Call (800) 565-1722 or click here for your free quote —simple, trusted, 100% secure!
Income FAQs
What are the residual income requirements for a reverse mortgage?
Is a debt-to-income ratio (DTI) required for a reverse mortgage?
Can assets count as a source of income?
Why do lenders care about income if there are no monthly payments?
Is there a maximum income that would keep you from qualifying for a reverse mortgage?
2025 HUD Credit Guidelines Update:
Municipal or state pensions no longer need to demonstrate the likelihood of continuation for credit qualification purposes.

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