A common question we are asked is “how old do you have to be in order to get an FHA-insured reverse mortgage?”
The simple answer is… 62.
But wait, there is more to the story.
The are strict age requirements to the FHA/HECM (Home Equity Conversion Mortgage) program and the age requirements state that each borrower be at least 62 years of age.
It seems that quite often, we speak with people where one person is over age 62, but their spouse is not. What happens in cases where both people are not over age 62 — does this mean that they can not participate in the FHA/HECM program?
It depends on what choices they make.
Possible Choice #1
Since one of the seniors is not yet over the age of 62, this means that the couple will not qualify for the reverse mortgage program and need to wait until both people are over age 62.
Possible Choice #2
Since one of the seniors is not yet over the age of 62, the spouse who is taken off title, which allows the spouse who is over 62 to qualify alone for the FHA/HECM program.
Ramifications Depending On Your Choice
If you choose #1, it is simple.
If you choose #2, be aware of the following possible scenarios:
Assume for a moment that the younger spouse who was taken off title is the first spouse to pass away. Since this younger spouse wasn’t an owner of the property, their death will not impact the program that is in place and the surviving spouse will continue living in the property with no changes to their reverse mortgage.
Now, let’s pretend that the older spouse who was on title and participating in the FHA/HECM program is the first spouse to pass away. If this were to happen, the loan then becomes due and in this case, the loan would need to be repaid in full.
So, in order to remedy this situation – the surviving spouse would need to do one of the following:
- Sell the home and move out
- Pay off the loan balance with savings or a regular “forward mortgage”
- Obtain a reverse mortgage (assuming that they are now over the age of 62 and meet the criteria)
If you are thinking about a FHA-insured reverse mortgage and either you or your spouse is not yet over the age of 62, this is only one of the many choices you will be faced with and need to be aware what impact your choices will have.
The FHA/HECM program is helping many seniors enjoy retirement – but it can also be a burden in the future if you don’t plan according to the choices you make!