Reverse Mortgage Loan Qualifications & Requirements

reverse mortgages

Many seniors are struggling to make ends meet during their retirement and are looking for options to supplement their income. Did you know about 50% of older Americans’ net worth is tied up in their home’s equity?1 A reverse mortgage loan or Home Equity Conversion Mortgage (HECM) works by using the available equity in your home and converting a portion of it into cash flow for your retirement.

This financial tool is available to senior homeowners 62 and older who would benefit from supplemental income for their retirement and allows them to continue living in their home during their golden years. To be eligible, you must meet general requirements: general qualifications, home qualifications, and financial qualifications.

General Requirements for a Reverse Mortgage Loan:

  • You must be at least 62 years or older
  • You must own your home
  • Your home must be your primary residence
  • You must complete a counseling session with a HUD-approved counseling agency

Home Requirements

There are certain types of homes that do not qualify for a HECM loan such as vacation homes, secondary homes, and income-producing land such as a farm do not qualify. Your home must be your primary residence and must meet one of the following to qualify:

  • Your home must be a single family home or a 4-unit maximum multiple family home with one unit occupied by you.
  • Your home can be a manufactured home as long as it meets FHA requirements.
  • Your home can be a condominium if it is HUD-approved. – More information about HUD-approved condos can be found on their website or through your reverse mortgage lender.

Financial Qualifications: 

With a reverse mortgage loan, one of the most important things to remember is that you are still responsible for paying property taxes, homeowner’s insurance, and home maintenance. You must also complete a financial assessment with your lender to evaluate your financial ability to meet the loan obligation.

A reverse mortgage loan may seem daunting, however over 1 million seniors have already found it to be a useful tool to help them fund their retirement and continue to age in place. Many homeowners have found that once they satisfy the requirements for reverse mortgages, the advantages of this unique loan helped them achieve a better quality of life. To learn more, contact a reverse mortgage professional at American Advisors Group.



  1. Harvard University Joint Center for Housing Studies, December 2016