1. Borrower Requirements
- Age: You must be at least 62 years old. (For Jumbo loans, some lenders accept age 55+).
- Ownership: You must own your home outright or have a low enough mortgage balance that it can be paid off with the reverse mortgage proceeds.
- Residency: The home must be your primary residence. You must live there more than 6 months out of the year.
- Federal Debt: You cannot be delinquent on any federal debt (e.g., federal student loans or income taxes).
2. Property Requirements
Eligible property types include:
- Single-family homes
- 2-4 unit properties (as long as you occupy one unit)
- HUD-approved condominiums
- Manufactured homes built after June 15, 1976 (must own the land/fee simple)
Note: Vacation homes, rental properties, and mobile homes on leased land (parks) are NOT eligible.
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3. Financial Assessment (LESA)
Since 2015, HUD requires a "Financial Assessment" to ensure you can afford ongoing property costs. Lenders will look at:
- Credit History: They check for a history of paying property taxes and insurance on time.
- Residual Income: You must have a certain amount of money left over each month after paying debts and property expenses.
What if I have bad credit? You can still qualify! However, the lender may require a "Life Expectancy Set-Aside" (LESA). This is a portion of your loan proceeds held back to pay your taxes and insurance automatically.
4. Jumbo (Proprietary) Requirements
If your home is worth more than the FHA limit ($1,209,750), you might look at a Jumbo product. Requirements differ slightly:
- Age: Often available to borrowers as young as 55 (in some states).
- Property: Can sometimes include high-value condos that aren't FHA approved.
- Loan Amounts: Up to $4 million.