Introducing the Reverse Mortgage Program
Have you ever thought, ‘Wouldn’t it be great if I had the money to do more of
the things I want to do?’ Now you can with a financial program for seniors called a
reverse mortgage. HUD’s Federally Insured Reverse Mortgage Program has helped
thousands of seniors supplement their retirement incomes.
When looking for ways to get cash from their home, most people consider selling their
home or borrowing against their home equity and making monthly loan repayments on a
home equity loan.
A reverse mortgage gives you a third option for getting money from your home.
The Reverse Mortgage Program allows you to obtain a loan to convert the built up equity
in your home into cash. A reverse mortgage is a way to stay in your home and receive
cash to use for any purpose.
No repayment of the loan is required during your lifetime or your spouse’s lifetime.
You can stay in your home for as long as you choose without making a loan payment.
Unlike a home-equity loan or traditional mortgage, with a reverse mortgage there
are no monthly payments. Paying off an existing mortgage with your reverse mortgage
eliminates your monthly mortgage payment. No repayment of the reverse mortgage is
required as long as you maintain residence in your home during your lifetime or your
As part of the reverse mortgage process, it is required that the homeowner(s)
participate in a counseling session with a HUD-approved counselor usually over
the phone. The purpose of the counseling is to give you unbiased consultation regarding
the benefits of the reverse program.
You maintain ownership and control of your home. You will never be asked to move
or sell to repay the reverse mortgage. All that is required is maintaining your property and
staying up-to-date with property taxes and homeowner insurance.
Your estate is protected. The amount to be repaid will never exceed the fair market
value of your home at the time the reverse is repaid, even if the reverse mortgage has
paid you more money than the value of your home.
There are three (3) basic requirements to qualify for the reverse program:
• Homeowners must be 62 years of age or older
• The home must be your primary residence
• There must be adequate equity in your home
Questions and Answers
December 1st, 2009
The US Department of Housing and Urban Development officially extended the loan
limits for its FHA insured reverse mortgage program with Mortgagee Letter 2009-50.
The national FHA loan limit for the HECM program in 2010 remains at $625,500
(150 percent of the national conforming limit). In the special exception areas
(AK/HI/GU/VI), the maximum claim amount on HECM mortgages is the same $625,500
limit as in all other areas. The loan limit shall be effective for all HECMs that have been
assigned a FHA case number on or after the effective date of this Mortgagee Letter.