What Are Reverse Mortgage Qualifications?

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A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a great tool to help seniors use their home’s equity to supplement their income ― but can any senior qualify? Seniors must meet very specific requirements for a reverse mortgage before they can apply. In addition, their home must meet certain qualifications. Eligibility for reverse mortgages depends on individual requirements, home qualifications and financial qualifications. Below, we’ll go through each condition so you can determine if you, your spouse and your home qualify for a reverse mortgage loan.

Individual Requirements

Before you evaluate your home and finances for eligibility, take some time to make sure you and your spouse or partner meet the individual requirements for a reverse mortgage. Since reverse mortgages are designed to help seniors stay in their home, there are certain reverse mortgage age requirements and other qualifications both borrowers must meet.

Here’s a quick breakdown of individual reverse mortgage loan requirements:

  • At least one borrower must be 62 years of age or older*
  • The house must be your primary residence
  • You can have a traditional mortgage but the proceeds from the reverse mortgage must be able to extinguish that debt

* Some states mandate that both borrowers be 62 years of age or older.

Need more information about individual requirements for a reverse mortgage? Contact a HomeBridge Mortgage Loan Originator today.

Home Qualifications

If you’ve met the individual requirements for a reverse mortgage, congratulations! Before applying for a reverse mortgage, make sure you learn as much as you can about reverse mortgage pros and cons and qualification requirements, including what home types qualify. If you live in one of these home types, you will meet the property qualifications for a reverse mortgage:

  • Single family homes
  • Multi-family homes that contain up to four units, as long as you occupy one as your primary residence
  • Condominiums
  • Manufactured homes*

*Although mobile homes aren’t eligible, some manufactured homes are, as long as they’re approved by the U.S. Department of Housing and Urban Development (HUD), and fulfill FHA requirements.

According to HUD, a manufactured home must meet these reverse mortgage qualifications in order to qualify:

  • Have a floor area of not less than 400 feet
  • Be constructed after June 15, 1976
  • Be classified as real estate
  • The mortgage must cover both the manufactured unit and its site
  • Be built and remain on a permanent chassis
  • Designed to be used as a dwelling with a permanent foundation built to FHA criteria
  • The finished grade elevation shall be at or above the 100-year return frequency flood elevation
  • The home must not have been installed or occupied previously at another site or location

Homes that don’t qualify for a reverse mortgage include vacation homes, mobile homes, co-ops, and multi-family homes of more than four units. We know you may have some questions about your home’s ability to qualify, so reach out to a Mortgage Loan Originator to see if your home meets reverse mortgage requirements.

Financial Qualifications

Once you satisfy the above reverse mortgage qualifications and obtain a reverse mortgage loan, there are a few financial obligations you must uphold. If you don’t, you risk defaulting on the loan. One of the financial conditions of getting a reverse mortgage loan is that you must continue to maintain your home and pay homeowners insurance and property taxes. Other obligations include, continuing with regular home maintenance, and complying with all terms of the loan.

Because reverse mortgages are insured by the federal government, you won’t qualify if you owe the government money. If you’re overdue on your taxes, a different loan, or federal student loans you won’t qualify. You must be current on such loans before trying to qualify for a loan. At HomeBridge, our reverse mortgage lenders will be able to tell if you’re delinquent by reviewing your credit report.

Counseling Requirements

Before you can get a reverse mortgage, you’re required by the federal government to participate in mortgage counseling. The goal of these counseling sessions is to protect those who may not be financially savvy or need extra help understanding the ins and outs of reverse mortgages. Mortgage counseling helps provide everyone with the education needed to make smart choices for their financial future. A reverse mortgage can be a little intimidating for some seniors and it’s always advisable to have a family member involved in the process.