What Is a Reverse Mortgage Loan?


A reverse mortgage loan is a financial tool available to homeowners aged 62 and older, allowing them to convert a portion of their home equity into tax-free cash. Unlike traditional mortgages, you don’t make monthly payments. Instead, the loan is repaid when the homeowner sells the house, moves out, or passes away. It’s a popular option for retirees who want to supplement income, pay medical bills, or simply enjoy retirement with financial peace of mind.

FHA HECM Reverse Mortgage Requirements

Age Requirement: The borrower must be 62 years or older to qualify for an FHA-insured Home Equity Conversion Mortgage (HECM).

Primary Residence: The home must be the borrower’s primary residence—meaning they live in it the majority of the year.

Property Type: Eligible properties include single-family homes, FHA-approved condos, townhomes, or 2-4 unit properties where the borrower lives in one unit.

Financial Assessment: Borrowers must undergo a financial review to ensure they can continue paying property taxes, homeowners insurance, and maintenance costs.

Mandatory Counseling: Participation in a HUD-approved reverse mortgage counseling session is required to ensure the borrower fully understands the loan terms and implications.

Benefits of Reverse Mortgage Loans

  • No Monthly Mortgage Payments

    Unlike traditional mortgages, a reverse mortgage allows you to access your home’s equity without having to make monthly payments. You continue to live in your home while receiving funds, easing cash flow and reducing financial stress.

  • Access to Tax-Free Cash

    The money you receive from a reverse mortgage is not considered taxable income. Whether you choose a lump sum, monthly payments, or a line of credit, you can use the funds freely to cover living expenses, medical bills, or home upgrades.

  • Stay in Your Home

    With a reverse mortgage, you don’t have to sell your home to get value from it. As long as you continue living in the property and meet basic obligations (like maintaining it and paying taxes/insurance), you can age in place comfortably.

Who Qualifies for a Reverse Mortgage Loan?

✓ You’re 62 years or older

✓ You own your home or have low remaining mortgage debt

✓ The home is your primary residence

✓ You can afford ongoing home-related costs (taxes, insurance, maintenance)

We'll show you exactly what's possible—without the red tape.

FHA HECM Reverse Mortgage Process

1

Pre-Approval

Speak with a reverse mortgage specialist to confirm eligibility and estimate your potential loan amount.

2

Identifying the Property

Your current home will be assessed to determine if it qualifies based on condition and value.

3

Underwriting

The lender reviews your financial profile, property condition, and other documentation.

4

Final Loan Approval

Once underwriting is complete and all requirements are met, you receive final approval.

5

Closing

Sign the final paperwork and receive your funds as a lump sum, line of credit, or monthly payments.

What Can You Finance With a Reverse Mortgage Loan?

Supplement Retirement Income: Use it to support daily living expenses without touching your savings.

Pay Off an Existing Mortgage: Eliminate your monthly mortgage payments completely.

Home Renovations and Repairs: Make your home safer and more comfortable as you age.

Cover Medical or Long-Term Care Costs: Pay for in-home care or healthcare expenses not covered by insurance.

Frequently Asked Questions About Reverse Mortgage Loan

  • Yes. You remain the legal owner of the home, as long as you meet the loan conditions.

  • The loan becomes due. Heirs can repay the loan or sell the home to cover the balance.

  • Only if you fail to meet loan obligations (like paying taxes, insurance, or maintaining the home).

  • No. The funds are considered loan proceeds and are not taxable income.

  • Yes, but you must use part of the reverse mortgage funds to pay off the existing mortgage first.

Success Stories

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Michael & Sarah Rodriguez

★ ★ ★ ★ ★

Working with this team made the complicated Los Angeles market much easier to navigate. Their expertise in conventional loans saved us thousands in interest and helped us close quickly on our Silver Lake home.

First-time homebuyers

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James & Amelia Wilson

★ ★ ★ ★ ★

The 203K loan process seemed intimidating at first, but this team guided us through every step. We were able to transform a fixer-upper in Highland Park into our dream home while staying within our budget. Their contractor recommendations were excellent.

Renovation loan clients

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David Chen

★ ★ ★ ★ ★

After being turned down by two other lenders, I was losing hope of being able to purchase and renovate my first property. This team not only got my FHA 203K loan approved, but they also helped me understand exactly what renovations would add the most value in my Echo Park neighborhood.

Self-employed borrower

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