The HECM is the most common reverse mortgage, federally insured by the FHA. Here are the exact requirements to qualify.
Who qualifies for a HECM reverse mortgage?
To qualify for a HECM, the youngest borrower must be at least 62, the home must be your primary residence, and you must own it outright or have significant equity. You must complete mandatory counseling with a HUD-approved agency and pass a financial assessment confirming you can keep up with property taxes, homeowners insurance, and maintenance. Eligible property types include single-family homes, FHA-approved condos, qualifying manufactured homes, and two-to-four-unit homes you partly occupy. The home must meet FHA condition standards or have repairs completed. Call 1-800-MEDIGAP to confirm whether you and your home qualify.
What is the HECM financial assessment?
The financial assessment is a review lenders conduct to confirm you can sustain your homeownership obligations, even though a HECM has no monthly mortgage payment. They examine your income, assets, and credit history, including your track record paying property taxes and insurance. If the review raises concerns, the lender may require a Life Expectancy Set-Aside (LESA), where part of your proceeds is reserved to cover future taxes and insurance. This protects you from default. It is not a pass/fail credit score test like a traditional mortgage. Call 1-800-MEDIGAP to understand how the assessment applies to you.