Reverse Mortgage FAQ: 18 Real Questions, Straight Answers

You keep the title, and you cannot be evicted for the loan balance growing. You can lose the home only by breaking the loan's three promises: living there as your primary residence, paying property taxes and homeowners insurance, and maintaining the home. Tax default is the most common trigger, and servicers must offer notices and repayment options before any foreclosure. Keep those three promises and the home is yours for life.

The loan becomes due when the last borrower (or protected non-borrowing spouse) dies. Heirs typically get up to six months, with extensions available, to choose: sell the home and keep any equity above the balance, keep the home by paying the lesser of the loan balance or 95% of its appraised value, or walk away owing nothing. The lender never simply takes the house without the estate having those options.

No. HECMs are non-recourse loans: the home is the only collateral. If the loan balance exceeds the home's value, FHA insurance covers the gap, and neither the estate nor the heirs owe the difference. What heirs do inherit is a smaller equity stake, since interest compounds over the years, which is why we suggest telling your family about the loan before, not after.

No. You remain the owner on title, exactly as with a regular mortgage. The lender holds a lien securing the amount you borrow. You can sell whenever you like, pay the loan off early without penalty, and any value above the balance always belongs to you or your estate.

At typical 2026 rates, HECM borrowers can access roughly 37% of home value at age 62, about 43% at 70, about 46% at 75, and about 50% at 80, before upfront costs and before paying off any existing mortgage. On a typical $410,000 Phoenix home, a 75-year-old might net around $177,000 with no existing mortgage. Our free calculator gives a personalized range in seconds.

Generally no. The IRS treats reverse mortgage proceeds as borrowed money, not income, so they are not subject to income tax and do not change the taxation of your Social Security. One related note: interest on a reverse mortgage is only potentially deductible when it is actually paid, usually at payoff. For unusual situations, ask a tax professional.

No. Social Security retirement benefits and Medicare are not means-tested, so loan proceeds do not affect them. Needs-based programs are different: SSI and Medicaid (in Arizona, AHCCCS and the ALTCS long-term-care program) can be affected if proceeds sit in your bank account past the month received. If you rely on those programs, structure draws carefully and raise it in your counseling session.

Plan on roughly 3-4% of home value upfront: a 2% FHA insurance premium, an origination fee capped at $6,000, and about $3,000-$5,000 in title, appraisal, and closing costs, almost all financed into the loan. Ongoing, interest (generally 6.5-8% in 2026) plus 0.5% annual FHA insurance accrue on the balance. Our costs guide itemizes everything with a worked example.

Yes, anytime, with no prepayment penalty. You can make voluntary payments of any size to slow the balance's growth, or pay the loan off entirely and keep the line of credit open for the future (paying down to a small balance rather than zero keeps a HECM line alive). Some borrowers treat a HECM like a flexible HELOC that can never be frozen.

There is no minimum credit score for a HECM. Lenders instead run a financial assessment: they review two years of property tax and insurance payment history, look at overall credit behavior, and check that your income leaves enough residual cash each month. Imperfect credit usually means a set-aside for taxes and insurance rather than a denial.

Yes, and it is one of the most common uses: the reverse mortgage pays off your existing loan at closing and eliminates that monthly payment. The math works when your balance is modest, roughly under 40% of home value as a rule of thumb. Owe more than the reverse mortgage provides and you would need to bring cash to closing to cover the difference.

Yes, with the right setup. The older spouse borrows and the younger is documented as an eligible non-borrowing spouse, which (under HUD rules updated since 2014) lets them remain in the home after the borrower dies, provided taxes, insurance, and occupancy requirements stay met. Proceeds are based on the younger spouse's age, and the survivor cannot draw remaining funds. Never remove a spouse from title casually; get counseling together first.

Condos qualify if the project is FHA-approved or passes single-unit approval, which matters in condo-heavy communities like Sun City. Manufactured homes qualify only if built after mid-1976, permanently affixed, and taxed with the land; park models and leased-land homes generally do not. Homes in a revocable living trust, common in Arizona estate planning, are fine when the trust meets FHA rules.

Yes. Federal law requires every HECM applicant to complete a session with an independent HUD-approved counseling agency and obtain a certificate before the lender can process the application. It typically costs about $125, can be done by phone in Arizona, and exists to protect you. Find agencies via HUD's counselor search at (800) 569-4287, and invite your adult children to listen in.

A typical Arizona HECM runs 30-45 days from application to funding: counseling first, then application, FHA appraisal, underwriting, closing, and a mandatory three-business-day right of rescission during which you can cancel. Condo approvals, repairs flagged by the appraiser, or title issues (common with older trusts and probates) are what stretch timelines.

No. You cannot outlive a HECM and you cannot owe your way out of the occupancy right. Even if the balance exceeds the home's value for years, you may remain in the home as long as you meet the occupancy, tax, insurance, and upkeep terms. This protection is exactly what the FHA insurance premiums pay for.

If you are out of the home more than 12 consecutive months, including for nursing or assisted-living care, the loan matures and must be repaid, normally by selling the home. A spouse who is a co-borrower or protected non-borrowing spouse can remain. If a care move looks likely within a few years, a reverse mortgage is usually poor value; see our alternatives guide first.

The federally insured HECM is a legitimate, heavily regulated loan, but scams do orbit the product: contractors pushing loans for repairs, "advisors" steering proceeds into annuities or investments, and imposters claiming government affiliation. Rules of thumb: no legitimate offer expires today, no government agency sells loans, and no one trustworthy tells you to invest reverse mortgage proceeds. When in doubt, stop and call a HUD counselor or the Arizona Attorney General's office.