A HECM reverse mortgage is a great mortgage program, but not everybody can get one. Yes, a reverse mortgage age requirement does apply.
However, how it applies depends primary on the marital status of the borrowers applying for the program.
Before I explain how the reverse mortgage age requirement works, let me first go over some of the basics of the reverse mortgage program. There is a huge amount of misinformation about the program out there, so I want to make sure we lay down at least a few basics.
What is a HECM reverse mortgage?
The acronym HECM (which is often pronounced heck-um by industry insiders) stands for home equity conversion mortgage, which is the most common reverse mortgage program in the United States. The HECM is FHA-insured and is designed to give seniors 62 years of age or older access to a portion of the value of their home without a mortgage payment or giving up ownership of the home.
No mortgage payments are required as long as least one borrower (or non-borrowing spouse) is living in the home and paying the required property charges. You always remain the owner of the home and you’re free to leave it to your heirs. You heirs will inherit any equity left over in the home. The HECM is a non-recourse loan, which means the most that will ever have to be paid back is the value of the home. If the value of the home isn’t worth enough to settle the entire balance, FHA will cover the shortage.
There is a reverse mortgage age requirement to qualify, but how the requirement applies depends mainly on your marital status.
One unmarried borrower
If you’re unmarried, you need to be at least 62 to be age-eligible for a HECM.
Two or more unmarried borrowers
Multiple unmarried borrowers all need to be at least 62 and living in the home to qualify.
If you’re married, only one spouse needs to be over 62. Theoretically, there’s no reverse mortgage age requirement for the other spouse other than the legal age for signing a contract.
If one spouse is younger than 62, he/she will be considered a non-borrowing spouse (NBS). The NBS is not a full borrower, but inherits the program protections if the older spouse passes away. In other words, if the older spouse dies, the NBS gets to continue living in the home for the rest of his/her life without making a mortgage payment as long as he/she pays the required property charges and maintains the home.
Note that age of the youngest spouse will be used to calculate the HECM proceeds. If the younger spouse is significantly younger, it can substantially reduce the proceeds available.
Note that as of this writing, NBS HECMs are not available in Texas.
No maximum reverse mortgage age requirement
I don’t get asked about this a lot, but it doesn’t come up every now and then. In case you were wondering, there is no maximum reverse mortgage age requirement. 🙂 You also are not required to repay the loan simply because you reach a certain age. Again, the reverse mortgage does not have to be repaid as long as least one borrower is living in the home and paying the required property charges.