Hello Chandra,

There is a financial assessment portion of the underwriting that does assess the borrowers’ credit.  HUD doesn’t have a minimum credit score you have to meet to get a reverse mortgage, but they are looking for borrowers that have overall acceptable credit. 

HUD is particularly interested in your most recent credit history and, even then, more so in your home, including any mortgage payments, taxes, insurance payments, HOA, or other assessments and whether they have been paid on time for the past 24 months. 

If there have been other debts that have late payments, then you can often still be unaffected if the late payments were all during a similar time frame and tied to a circumstance beyond your control, such as illness or death in the family or loss of job. 

Finally, HUD still gives most borrowers a chance to get a reverse mortgage with a set aside for taxes and insurance with most credit profiles, but that does cut into the funds available to the borrower. 

It’s not a fee; it is just an account set up with your available funds that the servicer uses to pay the tax and insurance installments as they come due.  The money is not borrowed until you use it, and the funds do not accrue any interest until borrowed, so it’s not a bad deal if you do not need the funds for other purposes.

Also See: Credit Requirements for a Reverse Mortgage