The logo for the Federal Housing Administration (FHA).

First appearing in 1961, a Reverse Mortgage (now formally known as a Home Equity Conversion Mortgage or HECM ), is a loan that provides cash payments based on home equity. With a Reverse Mortgage the repayment is typically deferred until the homeowner dies, sells the home, or moves out of the home. Unlike that first Reverse Mortgage in 1961, which was issued privately by a savings and loan outfit in Portland, Maine, modern Reverse Mortgage loans are strictly regulated and insured by the FHA (Federal Housing Administration ), a federal agency in the United States operated by the U.S. Department of Housing & Urban Development (HUD ). This is said to be for the protection of the borrower.

As stated before, there are a number of regulations, including eligibility requirements, applicable to Reverse Mortgage (HECM) loans. Below is a list containing those eligibility requirements. Please note: The Reverse Mortgage industry is constantly changing. While we work hard to ensure that you are receiving the most up-to-date information, we cannot guarantee that information provided hasnt changed since we last updated the following list. Please contact us directly here, or refer to HUDs Reverse Mortgage page for the most current eligibility requirements.

Reverse Mortgage (HECM) Eligibility Requirements*:

In addition to the eligibility requirements listed above, there are additional requirements regarding accepted property types, as well as financial requirements for the borrower. Those requirements are listed below. Please note: Per the Federal Housing Administration, all eligible property types MUST meet ALL FHA property standards and flood requirements.

Property Types Eligible For A Reverse Mortgage (HECM)*:

Borrower Financial Requirements For A Reverse Mortgage (HECM)*:

• Borrower income, assets, monthly living expenses and credit history will be verified
• Borrower timely payment of real estate taxes, hazard and flood insurance premiums will be verified

Amount Of Money Available To The Borrower:

The amount of money available to the borrower varies. The primary factors that determine the amount are the current age of the youngest borrower or non-borrowing spouse, the current interest rate, the lesser value of either the appraised value of the borrowers home, or the current FHA-set limit of $625,500, or the sales price, and finally, the initial mortgage insurance premium. Again, the total amount the borrower is eligible will be based on the aforementioned factors. In cases where there is more than one borrower (i.e. married couples), the age of the youngest borrower is what will be used in order to determine the amount available to be borrowed

Terminology You Should Know:

If you have any additional questions or are interested in obtaining more information regarding a Reverse Mortgage, please feel free to contact us. Please note: We exclusively serve the counties of Orange, Los Angeles, Riverside, San Bernadino, and San Diego.

*This list has been copied from The U.S. Department of Housing & Urban Development.