Reverse Mortgages

What Is a Reverse Mortgage?

A reverse mortgage allows homeowners aged 62 and older to convert a portion of their home equity into usable funds without making monthly mortgage payments. The most common program is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration.

Funds can be received as a lump sum, line of credit, monthly payments, or a combination—while the borrower retains ownership of the home.

Who Sets the Guidelines?

Reverse mortgage guidelines are established by the Federal Housing Administration for HECM loans. While private lenders originate the loan, FHA insurance standardizes borrower protections, counseling requirements, and loan limits.

Typical Reverse Mortgage Terms

• Available to homeowners 62+

• No required monthly principle and interest mortgage payments
  – Taxes And Insurance payments must still be made

• Funds accessed via:

  • Lump sum

  • Line of credit

  • Monthly payments

  • Combination options

• Loan balance grows over time as interest accrues

Common Reverse Mortgage Guidelines

• Age requirement: At least one borrower must be 62 or older

• Equity: Sufficient home equity required

• Mortgage insurance: Required upfront and annually

• Occupancy: Primary residence only

• Ongoing obligations: Borrower must maintain the home, pay taxes, insurance, and HOA dues

• Counseling: HUD-approved counseling required prior to closing

Benefits of Reverse Mortgage Financing

Reverse mortgages can provide flexibility and stability for retirees when used intentionally as part of a broader plan.

Key benefits include:

• No monthly mortgage payments, improving cash flow

• Tax-free loan proceeds (not considered income)

• Flexible access to funds for living expenses, healthcare, or emergencies

• Line of credit growth feature with unused balances

• Non-recourse loan, meaning you never owe more than the home’s value

Why Borrowers Choose Reverse Mortgages

Reverse mortgages are often used to supplement retirement income, reduce portfolio drawdowns, or create liquidity without selling the home. When coordinated properly, they can help manage market risk and preserve assets.

See If a Reverse Mortgage Is Right for You

A reverse mortgage should never be evaluated in isolation. Using the Evergreen 360 framework, we assess how a reverse mortgage interacts with your Income, Growth, Protection, and Legacy pillars—ensuring it supports retirement cash flow, estate planning, and long-term security.