For homeowners aged 62 and older who qualify, a Home Equity Conversion Mortgages (HECM), also known as a reverse mortgage, is a special type of home loan that lets you convert a portion of the equity accumulated in your home into cash. With a reverse mortgage, the equity payments from your loan can be paid to you.

Unlike a traditional home equity loan or second mortgage, repayment on the reverse mortgage is not required until the borrower(s) permanently moves out of the property or are no longer living.

Who Needs Reverse Mortgage Counseling?

In order to qualify for a reverse mortgage, the individual seeking a loan must participate in one-on-one reverse mortgage counseling from a government-approved agency. CESI’s Certified Housing Counselors provide reverse mortgage counseling to give all the information you need to make an informed decision. From helping you determine if a reverse mortgage is right for you, to educating you on how to avoid predatory lending practices, CESI’s reverse mortgage counseling equips you to make your decision with greater confidence.

How Much Can I Borrow?

Using a reverse mortgage, the amount you are eligible to borrow will depend on several factors including:

• Your age,
• Current interest rates
• The appraised value of your home

In most cases, the more value your home has, the older the borrower and the lower the interest rates, the more you may be eligible to borrow under a reverse mortgage.

What are the Requirements?

Borrower Requirements:

• Must be 62 years of age or older
• Must own the property (or have a small mortgage balance)
• Must occupy the property as the primary residence
• Must not be delinquent on any federal debt
• Must participate in a reverse mortgage counseling session with an approved reverse mortgage counselor

Property Requirements:

• Home can be single-family or a 1-4 unit home with one unit occupied by the borrower
• Can be a HUD-approved condominium
• Can be a manufactured home that meets FHA requirements

Financial Requirements:

• There are no income or credit qualifications required of the borrower
• There are no restrictions based on disability or social security status
• Repayment is not required while the property is the principal residence
• May finance closing costs in the mortgage

What Does Reverse Mortgage Counseling Offer?

Reverse mortgage counseling is offered by HUD-approved housing counseling professionals who can:

• Determine whether you qualify for a reverse mortgage
• Help you decide if you can afford a reverse mortgage
• Explain the costs, tax implications and payment options of a reverse mortgage
• Work with you to determine if using your home equity is the best choice for you right now
• Help you identify alternatives and options
• Make sure you fully understand how a reverse mortgage works

Reverse mortgage counseling can be completed over the phone or in person.

Upon completion of the reverse mortgage counseling session, you will receive a certificate that your lender will require as part of your loan application.