Did You Know?

Senior homeowners can cash in on their home equity with this FHA loan program. FHA Reverse Mortgages are also called Home Equity Conversion Mortgages.

Click to Start Your Refinance or Purchase Loan

FHA Reverse Mortgage

FHA Reverse Mortgage

Reverse mortgages have become increasingly popular with seniors who have equity in their homes and want to supplement their income. The FHA insures a reverse mortgage called the Home Equity Conversion Mortgage (HECM) that is available through FHA-approved lenders. These loans are available to homeowners aged 62 or older who have paid off or paid down a considerable amount of their mortgage.

How it Works

The FHA’s reverse mortgage program lets you to withdraw a portion of your home's equity. The amount that will be available for withdrawal varies by borrower. It depends on the age of the youngest borrower or eligible non-borrowing spouse, the current interest rate, and lesser of the appraised value or the HECM FHA mortgage limit or the sales price.

Funds can be received in the following formats:

  • Equal monthly payments for the rest of your life.
  • Equal monthly payment for an agreed period.
  • A line of credit, though there are caps on the size of some lump-sum withdrawals.

The principal and interest are due for repayment when the home is sold, or when the borrower dies. FHA mortgage insurance is also required with such a loan, which can be financed as part of the loan as well.

Who's it For?

To be eligible for an FHA reverse mortgage, you need to be compliant with the eligibility criteria.

  • You must be 62 years or older.
  • You must own the home outright or paid-down a considerable amount.
  • You must occupy the home as your primary residence.
  • You must remain current on property taxes, homeowner’s insurance, and other mandatory obligations.
  • You must participate in a consumer information session led by a HUD-approved counselor.
  • You must maintain your property and keep it in good working condition.
  • You must complete a consumer information session given by a HUD-approved HECM counselor.

There are also some property guidelines your house must fall under to be eligible for an HECM. It must be a single-family home or 2- to 4-unit home with one unit occupied by the borrower, a HUD-approved condominium project, or a manufactured home that meets FHA requirements.

About the One-Time Close Constuction Loan
Reverse mortgages are becoming popular with borrowers who have amassed equity in their homes and want to withdraw cash against the equity they've grown.
See Your Credit Scores From All 3 Bureaus
See Your Credit Scores From All 3 Bureaus

FHA Loan Articles

Is it the Right Time for an FHA Refinance?

With historically low interest rates, the mortgage industry has seen a sharp uptick in refinances. Taking advantage of the current market might be in your best interest and could lower your monthly payment significantly. Don’t forget that refinancing a mortgage comes with closing costs.

FHA Programs for Fixer-Upper Homes

The fact is that repairs and renovations to your home cost a lot of money. Luckily, the FHA has an option for those with fixer-uppers on their hands. The FHA 203(k) Rehabilitation Mortgages allows borrowers to finance the funds for renovations to a home.

Streamline Your FHA Loan Refinance

With the trend of falling interest rates since 2019, the number of mortgage refinances around the country has spiked and continues to rise. Borrowers with FHA loans can also capitalize on the low rates, but it may be possible to simplify the process with the FHA Streamline Refinance.

Do I Need an FHA Refinance?

Borrowers can choose to refinance for several reasons, but it comes down to prioritizing different benefits. One homeowner may want the lowest possible monthly payment, while another might want the shortest possible term for their loan.

What Homebuyers Should Know About Appraisals

A key step in the mortgage process is the home appraisal. In the case of home purchase or refinance, this is a task that is almost always required by the lender, and it is important that potential homebuyers understand what, how, and why of a home appraisal.  

Homeowner's Insurance - Why Do We Need It?

When buying a home, you have a list of things you need to do. Get pre-approved, arrange for a home inspection, and a few other tasks. One important thing on that list is shopping for homeowner’s insurance.

-- Find More Articles in the FHALoan Library --

FHALoan.com is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither FHALoan.com nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

SecureRights Advertiser Contact Information