- Age Requirement
The most basic eligibility requirement for a reverse mortgage is age. To qualify, you must typically be 62 years of age or older. This age threshold ensures that the program is primarily aimed at seniors who have built up equity in their homes.
You must own your home outright or have a significant amount of equity in it to be eligible for a reverse mortgage. If you still have an outstanding traditional mortgage, you may need to pay it off using the funds from the reverse mortgage or other sources.
- Primary Residence
The property you intend to use for a reverse mortgage must be your primary residence. This means that it's the place you live most of the time. You cannot use a reverse mortgage on a second home or an investment property.
- Financial Assessment
While a reverse mortgage doesn't require traditional income or credit checks, lenders may conduct a financial assessment to ensure you can meet the ongoing financial responsibilities of the loan. This includes property taxes, homeowners insurance, and basic home maintenance.
- Counseling Session
Before getting a reverse mortgage, you'll need to complete a counseling session with a HUD-approved counselor. This session aims to educate you about the program, its benefits, and potential drawbacks, helping you make an informed decision.
- Property Type
The type of property you own can also affect your eligibility. Single-family homes, condominiums, and some multi-unit buildings may be eligible. However, mobile homes and co-ops are usually not eligible for reverse mortgages.