Advantage of  Reverse Mortgages

• Many relatively poor people have significant equity locked up in their homes. Obtaining a reverse mortgage allows them to pay their living costs for an extended period of time without requiring them to get another job or leave their home.
• Unlike traditional home equity loans, a reverse mortgage does not require any payments until after the homeowner has moved or passed away.
• Since reverse mortgage income is in the form of a loan, it typically comes tax-free.
• Even if you live much longer than expected you can never owe more than the value of your home.

      Who is Eligible for Reverse Mortgages

         To be eligible for a HECM loan:

• you, and any other current owners of your home, must be aged 62 or over, and live in your home as a principal residence;
• your home must be a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Some manufactured housing is eligible, but cooperatives and most mobile homes are not;
• your home must meet HUD's minimum property standards, but you can use the HECM to pay for repairs that may be required; and
• you must discuss the program with a counselor from a HUD-approved counseling agency.

To apply for an FHA/HUD reverse mortgage, a borrower is required to complete a 45-minute counseling session with a HUD-approved counselor. The counselor will explain the legal and financial obligations of a reverse mortgage. After the counseling session, the borrower receives a "certificate of counseling" that is required before the loan application can be processed.