Reverse mortgage FAQs and helpful resources

To be eligible, you must be at least 62 years old and own your home. You need enough equity in the house to pay off any outstanding balances, and your home must be your principal residence. All applicants go through a financial assessment to confirm their financial capacity and willingness to keep up with the loan's ongoing obligations.

The amount depends on how old you are at closing, how much your house is worth, the total amount of liens against it, and current interest rates. Your existing mortgage payoff and other mandatory obligations, along with the payout option you choose, all affect how much cash you actually receive.

HUD limits borrowers to using 60% of the available money (after closing costs and fees) in the first year. The rest becomes accessible starting in year two. This first year cap allows for the greater of:

1. 60% of the Principal Limit (the total money available to the borrower over the life of the loan) in the first 12 months from your closing date, OR
2. The sum of your Mandatory Obligations (existing mortgage payoff, tax liens, closing costs, mortgage insurance premium) plus 10% of the Principal Limit. This total cannot exceed the total Principal Limit at the time of loan closing.

You have several options. You can take the money as a lump sum (up to HUD's first year maximum withdrawal), set up a line of credit, receive monthly payments, or combine any of these. In the first year, your line of credit or monthly tenure payments cannot exceed 60% of the Principal Limit. Starting year two, your available line of credit or monthly payments increase where applicable.

Fixed interest rate reverse mortgages only allow for the Single Disbursement Lump Sum payment plan.

Costs depend on a handful of items. There's an origination fee paid to the broker or lender, an FHA Mortgage Insurance Premium (MIP) on the HECM, an appraisal fee, a flood certification fee, a document preparation fee, plus title, settlement, and escrow fees. All of them are laid out clearly on the Good Faith Estimate (GFE). Monthly servicing fees could also apply.

FHA requires a Mortgage Insurance Premium (MIP) collected at closing and throughout the life of the loan. Those premiums are charged to your loan balance. The upfront MIP is calculated using your home's appraised value or a maximum of $1,249,125 (the 2026 national HECM limit), whichever is lower, and is charged at closing. The ongoing FHA insurance is calculated using each month's outstanding loan balance.

Yes. Counseling with an independent third party, HUD approved counselor is required to protect borrowers from receiving incorrect information about reverse mortgages. The lender has to have your counseling certificate in hand before they can close the loan. To find a reverse mortgage counselor near you, ask your Mortgage Loan Originator or contact your local HUD office.

Proceeds from a reverse mortgage are typically not subject to individual income taxation. That said, you'll want to consult your tax advisor about how it applies to your specific situation.

A reverse mortgage was designed so borrowers don't have to pay most fees during the course of the loan. Typical upfront costs are for the appraisal and HUD approved reverse mortgage counseling (some agencies waive counseling fees at their discretion). There may be a monthly servicing fee associated with your reverse mortgage, which is financed and added to the loan balance. For details on the service set aside, talk to your Mortgage Loan Originator.