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My wife and I live full-time in our RV. We moved our state residence status from Arizona to South Dakota. We retained our home in Arizona for a place to winter. We do not own any other property. We intend to stay in our Arizona house for the rest of our lives. I guess my question is, do we have to be a resident in our home state to qualify for a reverse mortgage?

By Doug on 12.06.2018

Hello Doug,

I hope this message finds you well. I wanted to clarify some important aspects regarding eligibility for the reverse mortgage program, particularly about the requirement for the home to be your primary residence. A primary residence is defined as the home where you reside for the majority of the year, specifically for more than six months.

It's perfectly acceptable to live in Arizona for over six months of the year and spend the remainder traveling in an RV. However, there are critical considerations regarding your situation.

Firstly, verifying your primary residence and actual occupancy is essential.

If your official documents, such as your driver's license, tax returns, and bank statements, list a South Dakota address, you would face challenges establishing residency in Arizona. Furthermore, the usage of your Arizona home during your absence raises questions. For example, if the property is rented out, it would not comply with HUD guidelines. Additionally, being away from the home for more than six months annually would disqualify you from meeting the loan's occupancy requirements.

The reverse mortgage program is strictly for primary residences, not for second homes or rental properties. From your description, it appears the Arizona home might currently serve as either a second home or a rental property. If that's the case, I recommend establishing a more permanent residency at this property before applying for a reverse mortgage.

Traveling is still possible with a reverse mortgage, but proving that the home is your primary residence is crucial. Should the lender conduct an occupancy check, you must demonstrate compliance with the loan's requirements to avoid the risk of the loan being called due and payable, which could potentially lead to foreclosure if the loan is not repaid promptly.

Please consider these points carefully as you contemplate your next steps. If you have any questions or need further clarification, feel free to reach out.

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