Eligibility · 5 min read
HECM Loan Requirements: Age, Equity, Counseling and More
To qualify for a HECM reverse mortgage, you must meet age, home, equity, and counseling requirements. Here's exactly what they are.
The Home Equity Conversion Mortgage (HECM) is the most common reverse mortgage, and it's backed by the FHA. To qualify, you need to meet a clear set of requirements. Here's what they are — in plain English.
1. Age: 62 or older
Every borrower listed on the title must be at least 62 years old. If you're married and both spouses own the home, the youngest spouse's age is what matters for eligibility and how much you can borrow.
There's also a provision for an eligible non-borrowing spouse — a younger spouse who isn't on the loan but may be able to stay in the home after the borrowing spouse passes away, provided certain conditions are met.
2. Homeownership and primary residence
You must own your home, and it must be your primary residence — the place you live most of the year. Reverse mortgages don't work for vacation homes or investment properties.
Eligible property types generally include:
- Single-family homes
- 2–4 unit homes (if you live in one unit)
- FHA-approved condominiums
- Manufactured homes that meet FHA standards
3. Sufficient equity
You need meaningful equity in the home. Most homeowners who qualify have paid off their mortgage entirely or have a small remaining balance that can be paid off from the reverse mortgage proceeds.
If you still owe a lot on your home, you may not have enough equity to qualify. The exact amount you can access depends on:
- The youngest borrower's age
- The home's appraised value
- Current interest rates
- FHA lending limits
4. Financial assessment
Lenders review your income, credit history, and monthly obligations to confirm you can keep up with property taxes, insurance, and home maintenance. This isn't about denying people — it's about making sure the loan is sustainable for you. If there are concerns, the lender may set aside funds to cover taxes and insurance.
5. HUD-approved counseling (required)
Before you can apply, you must complete a session with a HUD-approved reverse mortgage counselor. This independent conversation ensures you understand:
- How the loan works
- The costs and fees
- Your alternatives
- Your ongoing responsibilities
It's a required step, and it's designed to protect you. There's usually a modest fee, and the counselor is independent from the lender.
6. Ongoing responsibilities
After closing, you must:
- Continue living in the home as your primary residence
- Pay property taxes and homeowners insurance
- Keep the home in good repair
If you stop meeting these, the loan can become due.
What a reverse mortgage does not require
- You don't need a high credit score to qualify (though your credit is reviewed)
- You don't need to be debt-free
- You don't need a certain income level — but your ability to cover housing costs is assessed
Is it right for you?
Meeting the requirements means you're eligible — not that a reverse mortgage is the right choice for you. That depends on your goals, your plans for the home, and your overall financial picture.
Not sure if you qualify? Request a consultation with Bobbie — she'll help you confirm the basics and see if it's a good fit.