Q: What if my spouse is under age 62?

A: Unlike most states, Texas requires BOTH spouses to be at least 62 years old to qualify for a reverse mortgage. If one spouse is younger, you must wait until both meet the age requirement.

Example: Your husband is 65 and your wife is 60. In Texas, you must wait 2 years until your wife turns 62 before you can get a reverse mortgage.

Why Texas is different: This Texas-specific rule protects younger spouses from being displaced if the older spouse passes away, but it also means some couples must wait longer to qualify than they would in other states.

Alternative: Consider a home equity line of credit (HELOC) or traditional home equity loan to access funds until both spouses reach 62, then refinance into a reverse mortgage.

Q: How does Texas homestead protection work with a reverse mortgage?

A: Texas homestead protection remains intact even after you get a reverse mortgage. Your home is still protected from most creditors (except the mortgage lender, property taxes, and home equity loans).

What this means: If you have a lawsuit or judgment against you, creditors cannot force you to sell your home to satisfy the debt—even with a reverse mortgage in place.

Texas advantage: Texas has some of the strongest homestead protection laws in the country. This protection continues to shield your home from creditors throughout the life of your reverse mortgage.

Q: Can I get a reverse mortgage on my Texas ranch or rural property?

A: Yes, rural properties can qualify if they meet FHA requirements:

• The home must be your primary residence
• Property must be on 5 acres or less (FHA requirement)
• Must have utilities and road access
• Home must be in habitable condition

If your property exceeds 5 acres: The appraiser will value only the home and the 5 acres immediately surrounding it for purposes of the reverse mortgage.

Example: You own a 20-acre ranch near Fredericksburg. The appraiser will assess the home plus 5 acres around it. The remaining 15 acres won’t be included in the reverse mortgage value, but you still own them.

Q: Do I have to pay property taxes during the reverse mortgage?

A: Yes, you must continue paying Texas property taxes, which average 1.60-1.80% of your home’s assessed value annually.

Texas exemptions that help:

• Homestead exemption: Reduces your home’s taxable value
• Age 65+ exemption: Additional $10,000 school tax exemption
• Tax ceiling: School taxes FREEZE at the amount you paid when you turned 65 or when you qualified (called the “tax ceiling”)

Example: On a $350,000 home in Houston:

• Without exemptions: $5,600-$6,300/year
• With homestead + age 65+ exemptions: $4,800-$5,400/year
• With tax ceiling (frozen at age 65): $4,500-$5,000/year (stays frozen)

Q: What happens if I can’t pay my property taxes?

A: Failure to pay property taxes violates your reverse mortgage loan agreement and can result in foreclosure. Texas takes property tax collection very seriously—your home can be sold at a tax sale if taxes remain delinquent.

Protection option: If you’re at risk of not being able to afford taxes, lenders can set aside part of your loan proceeds in a “tax set-aside account” to automatically pay your property taxes each year. This reduces your available funds but protects you from foreclosure.

Financial assessment: During the application process, your lender will review whether you can afford to pay taxes and insurance. Given Texas’s higher property taxes ($400-$600/month on many homes), this is a critical part of qualification.

Q: Does getting a reverse mortgage affect my homestead exemption?

A: No, your homestead exemption remains in place. You continue receiving the same property tax exemptions you had before getting the reverse mortgage.

Your tax ceiling (if you’re 65+) also remains frozen—it doesn’t reset or change when you get a reverse mortgage.

Q: Can I sell my home if I have a reverse mortgage?

A: Yes, you can sell your home at any time. When you sell:

1. The reverse mortgage is paid off from the sale proceeds
2. You keep any remaining equity
3. There is no prepayment penalty

Example: Your home sells for $400,000. Your reverse mortgage balance is $250,000. You receive $150,000 (minus typical closing costs of $20,000-$30,000), leaving you with approximately $120,000-$130,000.

Q: What about Texas’s hot climate—do I need to maintain my AC?

A: Yes, absolutely. Your home must remain in good condition throughout the loan, including having functional HVAC. In Texas, a non-functioning air conditioner during summer months could be considered making the home uninhabitable, which would violate your loan terms.

Texas reality: With summer temperatures regularly exceeding 100°F, working AC isn’t just a comfort issue—it’s a habitability requirement.

Smart planning: Many Texas borrowers set up their reverse mortgage as a line of credit partly to cover future major repairs, including HVAC replacement costs ($8,000-$15,000). The line of credit grows over time at the loan’s interest rate, giving you an increasing reserve for home maintenance.

Q: Can I rent out my home with a reverse mortgage?

A: No, the home must remain your primary residence. You cannot convert it to a full rental property.

However: You CAN rent out a room or rooms while you continue living in the home as your primary residence.

Texas context: Some Texas seniors rent out a bedroom or garage apartment to supplement income while staying in their homes. This is allowed as long as you maintain the property as your primary residence.

Q: What happens if I need to move to a nursing home or assisted living?

A: The reverse mortgage becomes due if you are absent from the home for more than 12 consecutive months. This includes moves to assisted living facilities, skilled nursing facilities, or extended stays with family members.

Texas healthcare costs: Assisted living in Texas averages $4,000-$5,500/month. Nursing home care can be $5,500-$8,000/month. Many Texans use reverse mortgage proceeds specifically to fund in-home care services to delay or avoid facility placement altogether.

Planning tip: If you anticipate needing assisted living within the next 3-5 years, consider whether a reverse mortgage makes sense given the upfront costs of $15,000-$25,000.

Q: How does Texas’s no state income tax benefit me with a reverse mortgage?

A: Reverse mortgage proceeds are not considered taxable income anywhere in the United States. But in Texas, you also benefit from:

• No state income tax on Social Security benefits
• No state income tax on pension income
• No state income tax on investment income
• No state income tax on retirement account withdrawals

Combined benefit: A reverse mortgage provides tax-free cash flow in a state that already doesn’t tax your other retirement income. This makes Texas particularly attractive for retirees looking to maximize their purchasing power.

Example: A California retiree might pay 9.3% state tax on $50,000 in retirement income ($4,650/year). A Texas retiree pays $0 in state tax on that same income. Add reverse mortgage proceeds on top, and you’re maximizing every dollar.

Q: Can my children inherit my Texas home?

A: Yes, your children can inherit the home, but they must pay off the reverse mortgage balance. They have several options:

1. Pay off the balance: Use their own funds or refinance with a traditional mortgage
2. Sell the home: Pay off the reverse mortgage and keep any remaining equity
3. Walk away: If the loan balance exceeds the home’s value, they can walk away with no liability (non-recourse protection)

Texas timing: Your heirs must pay off the reverse mortgage within 30 days of your passing, or they can request extensions (typically up to 6 months total) to arrange financing or sell the property.

Texas community property consideration: If you’re married, discuss with an attorney how the reverse mortgage interacts with Texas’s community property laws, especially if you have children from a previous marriage.

Q: What if my home loses value while I have a reverse mortgage?

A: HECM reverse mortgages are “non-recourse” loans, meaning you (or your heirs) will never owe more than the home is worth when the loan becomes due.

Example: Your reverse mortgage balance grows to $300,000, but your home is only worth $250,000 when you sell or pass away. You (or your estate) only owe $250,000. FHA insurance covers the $50,000 shortfall—this is why you pay mortgage insurance premiums.

Texas market context: Texas homes appreciated 30-40% from 2020-2023 and have remained relatively stable. However, markets can fluctuate, and the non-recourse protection ensures you’re protected if values decline.

Q: How is Texas different from other states for reverse mortgages?

A: Texas has several unique characteristics:

1. Constitutional protections: Reverse mortgages are authorized by the Texas Constitution (approved by voters in 1997), not just state law. This means protections can’t be easily changed.
2. Both spouses must be 62+: Most states allow younger “non-borrowing spouses.” Texas requires both to be at least 62.
3. Homestead protection: Texas has some of the strongest homestead laws in America, protecting your home from most creditors even with a reverse mortgage.
4. Higher property taxes: Texas property taxes average 1.60-1.80% (vs. ~1.0% nationally), but seniors get significant exemptions and a tax ceiling at age 65.
5. No state income tax: Makes Texas attractive for retirees, and reverse mortgage proceeds add tax-free cash flow.