Reverse Mortgage Options for Veterans in 2022

March 9, 2022 By Michael Branson 26 comments

Question from our reader:

“We have a reverse mortgage, but we were never told that there was a reverse mortgage for veterans. We have quite a bit of equity in our home. Can we refinance our current reverse mortgage to a VA reverse mortgage?” -Debbie

Hi Debbie,

FHA and VA don’t offer loans directly. HUD through FHA insures loans and the VA guarantees loans (or at least a portion of the loan), but they still do not offer the loans – it is up to lenders to offer the loans and then have them insured or guaranteed by those entities.

Every few years I hear of a “reverse mortgage for veterans“ and when I research it, there are multiple articles and plenty of information wherein people call their program a “Veteran’s Reverse Mortgage” or a “Kosher VA Reverse Mortgage” or some other such wording but I have yet to see an actual program that is a reverse mortgage loan under a separate set of guidelines, offered by lenders and guaranteed by the VA.

Being that I have received this question several times recently and I would never claim I have a corner on all knowledge (and my wife will vouch for that), I decided to look yet again when I received your request to see if there was any new information.

I first checked the U.S. Department of Veterans Affairs website. They talk about the lending programs available to US Veterans.

There is information available about Purchase and Cash out Refinance Loans, Interest Rate Reduction Refinance Loans (aka IRRRL) and even Native American Direct Loans – but no VA guaranteed Reverse Mortgages.

When I type reverse mortgage in the search box, it takes me to a page on the index that is a warning issued by the Consumer Finance Protection Bureau in conjunction with the VA warning lenders and other advertisers to keep their advertising clean!

The notice from 2012 warns everyone that it is a crime to promise things that are not available and to mislead veterans and older Americans into thinking that there are programs that are not available.

The notice specifically names reverse mortgages and those who would mislead consumers into thinking that there was a government affiliation that did not exist.

I was 99.9% sure of what I would find before I checked because also as a member of the National Reverse Mortgage Lenders Association, we receive constant updates on programs as they become available.

Had there been a VA Reverse mortgage released recently or about to be, even though we are not currently a VA approved lender, I was confident that information would have reached us by now.

I think you have gotten the same thing a lot of borrowers have, some sort of notification wherein the term “VA Reverse Mortgage” or other similar language was used but then they go on to call the program a HECM – which is the acronym for a Home Equity Conversion Mortgage, the HUD or FHA program, not a VA program.

What the CFPB Says

Finally, I checked the Consumer Financial Protection Bureau’s website directly and found the answer I was looking for.

This was on the official government consumer protection site regarding this exact issue: https://www.consumerfinance.gov/ask-cfpb/i-saw-an-ad-for-a-no-payment-reverse-mortgage-from-the-department-of-veterans-affairs-va-is-this-legitimate-en-1719/:

So Debbie, there you have it.

I am sorry to say that the VA does not offer the program you seek so the answer to your question ultimately is no, you would not be able to refinance your current reverse mortgage with a “VA reverse mortgage”.

Furthermore, if you get an ad from someone saying they have such a program, I would suggest you toss it in the trash immediately because that’s probably where it belongs!

Veteran FAQs

Does the VA offer reverse mortgages?

Currently the VA does not offer any reverse mortgage loans.

Can you refinance a VA loan to a reverse mortgage?

Yes. A reverse mortgage loan can be used to pay off any type of existing mortgage on the property if there are enough funds to do so.

Can I sell my house if I have a reverse mortgage?

Yes. A reverse mortgage loan has no prepayment penalty so you can sell your home at any time and pay off the reverse mortgage.

Can you refinance a reverse mortgage to a VA loan?

Yes. Whether by a sale or a refinance, a reverse mortgage loan can be paid off at any time without penalty.

Veteran Mortgage VS HECM Product Comparison

Compare Features	HECM Reverse Mortgage	VA Mortgage
Borrower Minimum Age	62	18
Lending Limit	$970,800	$548,250
Income Requirements	Limited	Full Documentation
Credit Score	No Minimum	660
Reserves	No Minimum	2-6 Months PITI
Average Fixed Rate	3.06% (4.06% APR)	2.625% (2.913% APR)
Loan Duration	For Life	15-Year, 30-Year
$0 Monthly Payment Option	Yes	No
Low/No Closing Costs	No	Yes
Monthly Mortgage Insurance	.50% Monthly	None

VA Fixed Rate source: https://www.veteransunited.com/va-loans/va-mortgage-rates/#loan-type. 3.625% (3.913% APR) and 0.500 discount points on a 60-day lock period for a 30-Year VA Cash-Out

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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 17 years to reverse mortgages exclusively.

26 Comments on this Article

Brenda
April 30th, 2022

Great information! Our veteran father passed in 2018. Our mother (88) is living in her home and bedbound. We are considering a reverse mortgage to help pay for homecare and medical bills but wonder if it would be better to seek out a VA refi. based on how expensive reverse mortgages are and the short time we may need it. Another option is to refi her current mortgage to pull out cash but wondering if she can she get a VA loan as the spouse of a veteran? Just researching all options. Thank you!
Reply to Brenda
- ARLO™
  May 10th, 2022
  
  GHello Brenda,
  
  We do no VA financing so I am not the one to comment on those loans.
  However, since they do require monthly payments, you would need to determine if mom's income is sufficient for the required monthly payments. If it is, then compare the two programs and benefits and go with the one that best meets her needs.
  With the reverse mortgage, you could see what she would be eligible for with the Tenure payment and then she would receive the payment for life so no matter what the requirement was, she would be covered.
  Whichever way you choose to go, it's all about your mom and we wish you the best!
  Reply to ARLO
Tony
March 19th, 2022

Hello Arlo,

I'm age 60, as of Dec 2021, and 100% service-connected disabled vet. My wife & I have a 2.25% fixed 30 yr VA loan on a single-family residence in Los Angeles.

My mother just passed away at 93. I'm her sole beneficiary. She's had a reverse on her single-family residence for over 7 yrs. The payoff is $491k with a principal limit of $686k. Appraised market value is +/-$1.5M. I want to keep the property; however, not sure if I'll get approved on a conventional.

Question: Although I'm under 62, are there any provisions for a 100% disabled vet to be eligible for a reverse, or can I assume mom's existing reverse?
Reply to Tony
- ARLO™
  March 22nd, 2022
  
  Hi Tony,
  You cannot get a HUD HECM at age 60 and I am not aware of any programs for disabled veterans but that doesn't mean you are out of luck either!
  The jumbo private programs do have options that go to lower ages and at age 60, I think one might work well for you. The only caveat that I can see that you need to be aware of is that this must be your principal residence to qualify for a reverse mortgage of your own on that property.
  If you move into the home and are on title, you can probably apply for a jumbo reverse mortgage on that property at 60 years of age.
  I recommend that you talk to a lender first though and discuss your qualifications before you make any changes to be sure you will qualify with your current home as well.
  Reply to ARLO
Mary
March 9th, 2022

DO YOU HAVE ANY SPECIAL HELP FOR VETERANS REVERSE MORTGAGES?
Reply to Mary
- ARLO™
  March 9th, 2022
  
  Hello Mary,
  I am not aware of any reverse mortgage programs specifically for veterans.
  I believe there are higher lending limits for Veterans with regard to the loan to value allowed on forward loans but that would be contrary to the idea of a low loan to value and then no payments as are the case with reverse mortgages.
  Veterans are certainly eligible for the FHA reverse mortgages as well though.
  Reply to ARLO
Debbie
July 23rd, 2021

I am basic borrower on Reverse mortgage on our home, my husband is second owner.
He is a Disabled veteran, is he eligible for a VA Home Loan although this home is $68k in Reverse mortgage but is valued at $160? Is my husband a Veteran eligible for VA Loan?
He is 72. Thanks ARLO!
Reply to Debbie
- ARLO™
  July 25th, 2021
  
  Hello Debbie,
  
  To my knowledge, there is still no VA reverse mortgage program available and so you would be looking at refinancing your FHA reverse mortgage with a new VA loan that does require monthly payments. We do not offer VA loans and I honestly could not advise you on their requirements or the amounts available under the VA programs.
  I would need to direct you to one of the lenders who originate VA loans to answer your question, but I honestly do not believe it matters who is listed first on title. I would contact one of the VA lending specialists listed online after checking on their borrower ratings.
  Reply to ARLO
Bruce L.
January 21st, 2021

I thought I saw an ad for a quick and easy reverse mortgage refinance for veterans with " money in your pocket". Is this true or did I year wrong? B.
Reply to Bruce
- ARLO™
  January 22nd, 2021
  
  Hello Bruce,
  I cannot comment as I have not seen the ad but I am not aware of any such program. There are many lenders who advertise the IRRRL (Interest Rate Reduction Refinance Loan) which is a VA loan program that does not require a lot of the same information and exhibits as a typical loan program (which includes an appraisal under most circumstances and income or asset verification). But that is for the replacement of one VA loan with another forward, not reverse mortgage, in which you meet the program requirements.
  Reply to ARLO
Grau
September 14th, 2020

We are purchasing our home with a VA loan. Can we rent a room to a family member? We will occupy the home as well. We just want to help our son while he gets back on his feel.
Reply to Grau
- ARLO™
  September 14th, 2020
  
  Hello Grau,
  
  We do not handle VA loans and I am not familiar with them. I cannot give you this information.
  If you meant to say a reverse mortgage loan and not a VA loan, the answer would be yes, you can rent rooms to family members or anyone else you choose as long as you are not renting on a transient or short term basis (nightly or weekends).
  Month to month or annual lease is fine.
  Reply to ARLO
Nancy
March 13th, 2020

If I am eligible for a VA loan to pay off my reverse mortgage, approximately how much would monthly payments be in repaying that VA loan? My husband is a Vet and so far has a percentage of VA benefits from agent Orange, still waiting about Parkinson's and prostate cancer. I would love to pay the reverse mortgage off and want to know if a VA loan could be affordable for us??
Reply to Nancy
- ARLO™
  March 19th, 2020
  
  Hello Nancy,
  
  I am afraid I cannot answer your request. I do not supply VA financing and so even if I did have your information which is required to determine loan amounts and repayment schedules, etc. (which is not included with your inquiry), I am not familiar with current VA programs and pricing since we do not offer this financing. I would strongly recommend that you contact a VA specialist and tell them what you owe on your current loan, your approximate value (or at least your address so they can view comparable sales data) and then they will be able to let you know what programs are available with corresponding costs. They should also be able to supply you with the appropriate amortization schedules of payments based on that information so that you can make an informed decision as to the affordability of the payments.
  Reply to ARLO
Glenda I.
October 12th, 2019

How much money will you lose if you do a reverse mortgage for cash out of $480,000, then you end up selling it in less than 1 year. How much money does it cost in fees to get the loan and then all the fees that accrue for first year? When do you have to start paying the loan back? Are there any discounts for a 93 disabled navy vet of world war ll.?
Reply to Glenda
- ARLO™
  October 12th, 2019
  
  Hello Glenda,
  
  The reverse mortgage is not a good option for a 1-year loan and I would not recommend it as such. There are other less expensive loans if you think you will only need the loan for a period of 12 months such as a Home Equity Line of Credit.
  You pay the loan back after you no longer live in the property but all the fees including the HUD mortgage insurance are "front loaded" meaning you pay them at the start by adding them to the loan balance and if you are only planning on keeping the loan for a year, it is a very expensive loan for such a short time.
  There are no VA benefit reductions in the costs as it is an FHA loan and not a VA loan and I am not aware of a VA reverse mortgage option.
  Reply to ARLO
Jerome T.
September 4th, 2019

I have a VA loan! Can I get a reverse mortgage?
Reply to Jerome
- ARLO™
  September 4th, 2019
  
  Hello Jerome,
  
  You can pay off a VA loan with a reverse mortgage. The issue that usually makes this a bit tougher is that VA loans typically start at a higher loan to value so it would just depend on whether your equity position is high enough in the property to qualify under the terms of the reverse mortgage. But if so, there is no problem paying off a VA, FHA, conventional loan with a reverse mortgage if the numbers work.
  Reply to ARLO
Mary
August 19th, 2019

My spouse is a disabled veteran who is just recovering from a Kidney transplant. He is an amputee and blind in one eye and has limited vision in the other eye. He is still very weak, and he must use a wheelchair to move around. Can we ask for over the phone counseling (maybe thru SCIPE?) due to his current medical hardship?
Reply to Mary
- ARLO™
  August 19th, 2019
  
  Hello Mary,
  Unless you live in a state that requires face to face counseling, it can be done on the phone and most borrowers still opt for phone counseling due to proximity of the closest counselor and it not being convenient to meet in person anyway.
  Reply to ARLO
Eli
July 21st, 2019

My parent has a reverse mortgage. If I decide to keep the home after she passes, will I be able to use my VA loan to pay off the loan balance?
Reply to Eli
- ARLO™
  July 21st, 2019
  
  Hello Eli,
  
  I can't tell you what loans you would be eligible to receive but if you are eligible and qualify for a VA loan as a refinance on the property after the title is in your name, I see no reason why not.
  The reverse mortgage is due and payable, and the reverse mortgage has no requirements as to where you finance or where you get the money so it would just be a matter of your VA lender and their requirements on the new loan.
  Reply to ARLO
Joe Stegina
November 30th, 2018

great artical. am vet and we are considering a rev mortg. like where we live but soon will not be able to afford.
Reply to Joe
- ARLO™
  November 30th, 2018
  
  Thank you for the compliment Joe and thank you for your service! I wish you
  the best now, and in the future. If we can be of any help, please don't hesitate to call upon us.
  Reply to ARLO
Mark Alan Brown
November 5th, 2018

We have a paid -off home, but need to repair and update the home. Could a home-equity second mortgage be converted to a VA guaranteed loan?
Reply to Mark
- ARLO™
  November 5th, 2018
  
  Hello Mark,
  
  You would have to contact a VA loan company to request information about different VA options, but generally speaking, most loans cannot be converted from one loan type to another. If you want a VA loan, you can do a VA refinance. That loan would pay off the existing HELOC but there is no way of which I am aware to just convert the existing loan.
  Reply to ARLO

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