Mortgage Income Information and Resources

A reverse mortgage is a financial tool offered to senior citizens that allows them to tap into their home’s equity in exchange for controlling interest in the house. This is a loan that defers payment until:

1. The homeowner passes away

2. The homeowner moves

3. The homeowner enters an assisted living facility

4. A reverse mortgage is different than a conventional mortgage. In a conventional mortgage, a mortgagee agrees to make monthly payments to the lender that includes principle, interest and sometimes homeowner’s insurance premiums and property taxes, thus reducing the amount of debt against the home. In a reverse mortgage, the owner has typically paid off a conventional mortgage and owns the house free and clear. This loan pays the owner, in either a lump sum or in monthly payments, thus increasing the amount of debt against the house.



In order to qualify for an FHA or HUD reverse mortgage, the applicant must meet certain requirements:

1. The applicant must be at least 62 years old at the time of the application

2. While there are no minimum credit or income requirements, an applicant must either: Own the home free and clear or pay off the balance of the conventional mortgage with the proceeds of the reverse mortgage.

3. A pending bankruptcy will halt the process as new debt can not be obtained for a period of time post bankruptcy.

4. Certain dwellings will either not qualify, or will be subjected to certain requirements, such as mobile homes. Mobile homes must be set up on a permanent foundation in order to qualify.

5. In accordance with reverse mortgage terms set forth by the Department of Housing and Urban Development (HUD), an applicant must attend credit counseling before a reverse mortgage can be approved.