An Overview of Reverse Mortgages
A reverse mortgage is a loan product for homeowners over the age of 62. A homeowner can access a portion of the equity they have in their primary residence. Unlike other types of mortgages, there is no income or credit qualifying and no monthly mortgage payments. The reverse mortgage must be in first lien position at closing. The borrower retains full ownership of the property. Repayment is required when the last remaining borrower no longer resides in the home as their principal residence or defaults on the terms of the loan.

Types of Reverse Mortgages
There are only two distinct types of reverse mortgages at this time:
HUD/FHA Home Equity Conversion Mortgage (HECM)
Proprietary Products

Borrower Eligibility
All borrowers on loan must be 62 years of age or older. If a deeded owner of the property is not eligible due to age, they would need to be removed from the title. This is a very serious decision and it may involve serious consequences for the younger borrower. It should first be discussed with their legal or financial advisor. Removing them from the deed could result in them having to vacate the home when the older borrower dies or has to vacate the premises, perhaps to go to a nursing home. Never advise someone to do this as it is unfair to the removed occupant unless they fully understand the consequences.

Just as it is true for all FHA mortgages, U.S citizenship is not required for eligibility. For those borrowers with lawful permanent resident alien status, the mortgage is available under the same terms and conditions as U.S. citizens. Evidence of permanent residency in the form of documentation issued by the Bureau of Citizenship and Immigration Services must be provided.

Reverse mortgages may also be available to non-permanent resident aliens provided they have a valid social security number. Non-U.S. citizens with no lawful residency status in the U.S. are not eligible. The rules are the same as for forward FHA mortgages.