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FREQUENTLY ASKED QUESTIONS
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1. What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in their home into
cash. The equity built up over the years can be paid to you. But unlike a traditional home loan or second mortgage, no
repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage
provides these benefits, and it is federally-insured as well.
2. How do I know if my home qualifies?
Homes that qualify must be a single family dwelling or a two-to four unit property that you own and occupy. Townhouses,
detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-
approved. It is possible for individual condominiums units to qualify under the Spot Loan Program.
3. How do I know if I qualify?
You qualify for a reverse mortgage if you, the borrower, is a homeowner, 62 years of age or older, own your home, and
must live in this home. You will also be required to attend a HUD-approved counseling information session prior to closing
on the loan.
4. Do you have to have FHA mortgage insurance on your current home loan?
No. You do not have to have or have had FHA mortgage insurance on your current or paid off home loan. You will be
getting a new FHA-insured mortgage loan with this program.
5. Will I still have an estate to leave to my heirs?
At the time that you no longer live in your home as primary residence for whatever reason, you or your estate will repay
the cash you received from the reverse mortgage, plus interest and other fees to the lender. The remaining equity in
your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage
loan. This debt will never be passed along to the estate or heirs.
6. Can my home be taken away if I outlive the loan?
NO! You can never owe more than your home's value and you will never need to repay the loan as long as you continue
to live in the home and keep the insurance and taxes current.
7. How much cash can I receive from my home?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or
FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the
lower the interest, the more you can borrow.
8. How can I receive the cash from my home?
There are five available options to receive your funds:
- monthly payments as long as at least one borrower lives and continues to occupy the property as a principal
residence.
- equal monthly payments for a fixed period of months selected.
- line of credit- unscheduled payments or in installments, at times and in the amounts of borrower's choosing until the
line of credit is exhausted.
- combination of line of credit with monthly payments for as long as the borrower remains int he home.
- combination of line of credit with monthly payments for a fixed period of months selected by the borrower.
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