To qualify for a federally insured reverse mortgage (a HECM), you and your home both have to clear a set of rules. Here’s what actually gates approval — the eligibility checks up front, and the obligations that continue for the life of the loan.
The youngest borrower must be at least 62. If a spouse is younger, they can be listed as an “eligible non-borrowing spouse,” which lets them stay in the home if the borrower dies — but the younger age reduces how much you can borrow, and the non-borrowing spouse can’t access loan funds. Getting this right matters; a counselor will walk through it.
You must live in the home as your principal residence. Second homes and investment properties don’t qualify. If you’re out of the home for more than 12 consecutive months — including an extended stay in a care facility — the loan can become due and payable.
You need substantial equity — in practice, most homes should be owned outright or close to it. Any existing mortgage must be paid off at closing, typically using the reverse-mortgage proceeds, because the HECM has to be the only lien on the property. How much you can borrow depends on the youngest borrower’s age, current interest rates, and the home’s value (up to the FHA lending limit). See your estimate in the calculator.
Before you can even apply, federal rules require you to complete a session with an independent, HUD-approved reverse-mortgage counselor. This is a consumer protection, not a formality: the counselor reviews your finances, explains the costs and alternatives, and confirms you understand the loan. You’ll get a certificate that the lender needs on file. There’s usually a modest fee, which can sometimes be waived.
Since 2015, lenders must run a financial assessment of your income, assets, and credit history. It isn’t about qualifying for a payment (there isn’t one) — it’s about confirming you can keep up property taxes and homeowners insurance. If the lender has doubts, they may require a Life Expectancy Set-Aside (LESA) — money carved out of your proceeds to cover those bills, which reduces the cash you receive.
The property generally must be one of these eligible types, and must meet FHA condition standards (needed repairs may be required):
The home must meet FHA minimum property standards; if an appraisal flags repairs, they may need to be completed (sometimes funded from the loan) for the loan to close.
Meeting the requirements to get a HECM isn’t the end. For the life of the loan you must:
These aren’t fine print. Failing any of them is a default that can lead to foreclosure — the mechanism behind most reverse-mortgage horror stories. Build these ongoing costs into your plan before you sign.
Qualifying comes with costs — an upfront mortgage-insurance premium, an origination fee, and standard closing costs, plus an ongoing annual mortgage-insurance premium added to the balance. Exact figures depend on your home’s value and the lender; our calculator itemizes an estimate, and your HUD counselor confirms the real numbers.
Meet the requirements and still unsure it’s right? Weigh the pros and cons, read whether it’s a good idea for your situation, and compare it against a HELOC, home-equity loan, cash-out refi, or downsizing.
Educational, not individual financial advice. The Equity Ledger doesn’t originate loans. Reverse mortgages are complex and the right answer depends on your specific situation — confirm the details with a HUD-approved counselor before you decide.
Rules and figures are from U.S. government program materials current at publication; HECM limits and rates change — verify with HUD/FHA or a HUD-approved counselor.