Navigating the complexities of reverse mortgages can be challenging for many homeowners. Primarily designed to aid those in or nearing retirement, reverse mortgages offer a unique financial solution, allowing homeowners to tap into their home equity while continuing to live in their homes.  

Homeowners can use the money from a reverse mortgage to meet a range of financial goals, from supplementing monthly income to funding major projects such as home renovations to establishing a source of funds to tap into in the event of unplanned expenses, to name a few.  

Accessing additional money can be especially advantageous during retirement as cash flow can be challenging, and many senior homeowners live on a fixed income. 

This article explores what it takes to qualify for a reverse mortgage, including the reverse mortgage criteria, types of reverse mortgages, and the obligations that come with them. 

Reverse Mortgage Requirements  

Borrowers must meet the following requirements to qualify for a reverse mortgage: 

Age 

One of the primary eligibility requirements for a reverse mortgage is the borrower’s age. The minimum age required for a reverse mortgage is 62 years. In cases with joint borrowers, the youngest borrower’s age is used to determine the loan amount. This age threshold targets homeowners typically in or approaching retirement. They might be looking for ways to supplement their retirement income using the equity they have built in their homes. 

Residency 

The home must be your primary residence. To qualify as a primary residence, the homeowner must live in the property for most of the year. For this reason, investment properties and vacation homes do not qualify for reverse mortgages. 

Equity    

Having equity in the home is required to qualify for a reverse mortgage. Equity refers to the portion of the home’s value that the homeowner owns. It is calculated by subtracting any outstanding mortgage balances or liens from the home’s current market value. While the house must have equity to qualify for a reverse mortgage, there is no specific minimum equity requirement.  

Counseling 

Before officially applying for a reverse mortgage, you must complete a counseling session with a third-party counselor approved by the HUD. This counseling session aims to educate potential borrowers on what’s involved in obtaining a reverse mortgage, the costs and fees, and the pros and cons of a reverse mortgage loan. This typically takes approximately 90 minutes. The reverse mortgage advisors at Mutual of Omaha Mortgage will give you a list of qualifying counselors to contact.  

Property Requirements  

For a property to qualify, it must be in good condition. In addition, the property must fall under one of the following categories:  

• Single-family homes 2-to-4-unit properties in which you occupy one of the units Townhouses Condominiums that are FHA-approved Manufactured homes that meet HUD requirements and were built after June 1976  

If you are uncertain if your property qualifies, the Mutual of Omaha Mortgage reverse mortgage specialist can assist you in making this determination. Reach out today to learn more.   

Types of Reverse Mortgages and Their Requirements 

It is worth noting that there are four different types of reverse mortgages because some come with different requirements: 

• Home Equity Conversion Mortgages (HECMs). HECM reverse mortgages are the most common reverse mortgages, and this is the type of reverse mortgage we are addressing in this article.  
• Reverse Mortgage for Purchase. Also known as HECM for purchase, this type of reverse mortgage combines a down payment from selling a previous home with a reverse mortgage loan. The qualifications for this type of reverse mortgage are the same as a traditional one. 
• Jumbo Reverse Mortgages. These are proprietary reverse mortgage loans developed by individual lenders. They are designed for high-value homes and allow access to larger equity amounts. Many of the requirements are the same as a HECM reverse mortgage. However, in some cases, jumbo loans are available to homeowners who are as young as 55 years of age. But this varies depending on the lender and the state. In addition, jumbo reverse mortgages do not require paying mortgage insurance premiums.  
• Single-Purpose Reverse Mortgages. Government agencies and non-profits offer single-purpose reverse mortgages for specific purposes like home repairs. These are also typically only available to those at least 62 years of age, but, as the name implies, borrowers can only use them for a single purpose approved by the government or non-profit group.  

Final Thoughts  

Reverse mortgages offer a flexible solution for homeowners seeking to leverage their home equity for financial stability or other purposes in retirement. Understanding the loan types, requirements, and responsibilities is important for making an informed decision.  

Our reverse mortgage advisors can help you understand more about whether you qualify for a HECM loan or not. Reach out today to learn more!  

Is Mutual of Omaha Mortgage right for your reverse mortgage needs? Don’t take our word for it. Check out these Mutual of Omaha Reverse Mortgage Reviews to see what our customers are saying.

Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. 

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

Step 1: Talk to a Reverse Mortgage Advisor 

The first thing we recommend doing if you are ready to apply for a reverse mortgage is to talk to one of our reverse mortgage loan advisors. They will assess your specific circumstances and provide you with an estimate of the amount of money you could potentially receive through a reverse mortgage. 

In addition, they will be able to answer any questions or concerns you may have to ensure that a reverse mortgage is the right option for you. Your reverse mortgage advisor will walk you through exactly what you can expect and will be your personal resource as you go through this process.   

Step 3: Submit Your Application 

As soon as your reverse mortgage loan advisor receives the certificate of completion from your counseling session, your application may be submitted. Your advisor will help you get the application filled out and will notify you of any documentation that needs to be included.  

This may include items such as a photo identification, a copy of your homeowner’s insurance policy, and your most recent property tax bill.   

The sooner you can get all the required documentation submitted, the sooner you will be able to close on your loan.   

Step 5: Processing and Underwriting 

The application and all related documents will be sent for review and processing by the underwriting team. While the underwriting process for a traditional mortgage is typically automated, underwriting for a reverse mortgage is a manual process.  

The underwriter will verify that you meet all the reverse mortgage requirements and that you have submitted all the necessary documentation for approval.  

The underwriter will either approve, approve with conditions, or deny. If you are approved with conditions, this will typically mean that there’s additional documentation that needs to be submitted or a home repair that needs to be done before the loan can be finalized.   

Your reverse mortgage loan advisor will reach out to you if there is any additional documentation or repairs that need to be done.   

Step 7: Receive Your Funds 

There is a waiting period that lasts for three business days before you can start receiving your funds. Once that period is over, you will start to receive your funds.  

You may receive your funds as a lump sum, monthly payments, a line of credit, or a combination of the three. You will choose how you want to receive your funds during the application process.   

If you still have a mortgage or other lien on your home, the reverse mortgage will also pay off those loans.   

If you’re ready to move forward with a reverse mortgage, learn more by grabbing our free reverse mortgage guide or find a reverse mortgage loan officer here.  

Is Mutual of Omaha Mortgage right for you? Don’t take our word for it. Check out these Mutual of Omaha Reverse Mortgage Reviews to see what our customers are saying.

Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

Another concern for those entering retirement is what options they have if they find themselves needing long-term care, such as in-home healthcare services, or if they need to move into a nursing home.  

Can a homeowner still get a reverse mortgage if they need eldercare? Will they have to give up their reverse mortgage if they move into a nursing home? What if they receive in-home care?  

In this article, we will explore all of these questions and more.  

Reverse Mortgage Explained

Having a basic understanding of a reverse mortgage will help lay the foundation for how a reverse mortgage can and can’t be used.  

The most common type of reverse mortgage loan is the home equity conversion mortgage (HECM). The other types are single-purpose reverse mortgages and jumbo reverse mortgages.  

The standard reverse mortgage is backed the federal government through the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD).  

A reverse mortgage works by paying off the current traditional mortgage, if there still is one. The remaining reverse mortgage proceeds can then be received in the form of one or more of the following payment options: a lump sum payment, a line of credit, and/or monthly payments.  

The amount of money that homeowners are able to obtain through a reverse mortgage depends on the value of the home, the age of the youngest borrower, and the interest rates.  

The FHA does put a lending limit on how much homeowners are able to borrow through a reverse mortgage. The current lending limit as of 2026 is $1,249,125. 

The reverse mortgage loan becomes due when the senior homeowner decides to sell, he or she no longer lives in the home as their principal residence, or when the last remaining borrower passes away.  

What Can a Reverse Mortgage be used for? 

There are no rules about how a reverse mortgage has to be used, which gives borrowers a lot of flexibility. Some common uses of a reverse mortgage:  

• Supplementing monthly income. One of the most common uses of a reverse mortgage is to supplement monthly retirement income. This can be especially beneficial for retirees who may not have enough savings or income in retirement accounts to cover their expenses. 

• Paying off credit card debt. Reverse mortgages can also be used to pay off existing debts, such as credit card debt or medical bills.  
• Home renovations and repairs. Many homeowners use reverse mortgages to fund home renovations or repairs. This can include updating kitchens or bathrooms, replacing the roof, or making home modifications to make the property more accessible for those who have developed mobility challenges. 
• Delaying Social Security benefits. Some individuals choose to take out a reverse mortgage to delay claiming their Social Security benefits. By doing so, they can increase their monthly benefit amount when they eventually start receiving Social Security. 
• Managing unexpected expenses. A reverse mortgage can provide a safety net for homeowners facing unforeseen financial challenges. Whether it’s a major car repair or a sudden home repair, having access to additional funds can help alleviate stress. 

How to Use a Reverse Mortgage to Pay for Long-Term Care? 

There are multiple options for how you can receive reverse mortgage proceeds: as a lump sum, monthly payments, a line of credit, or a combination of the three. Two of these options may be especially ideal when it comes to paying for long-term care, depending on your goals.  

First, if one of the primary reasons you are considering a reverse mortgage is to have funds available in the event that you need eldercare services, you may want to opt to receive your funds as a line of credit.  

A reverse mortgage line of credit allows you to use the funds on an as-needed basis. This is ideal for eldercare services since you don’t know when you will need it. Another advantage of a reverse mortgage line of credit is that the untouched loan actually grows over time. 

Second, another way to pay for long-term care is to purchase a long-term care insurance policy.
The premiums for long-term care insurance range from about $80 to $600 depending on the age and type of insurance.  

If this is a cost that you are not able to cover with your current income, a reverse mortgage in the form of monthly installments could help offset those costs.  

Our reverse mortgage specialists will present you with a variety of options for you to consider. 

Final Thoughts

If you are considering a reverse mortgage and you would like to find a way to use it to fund long-term care, you do have some options as long as you don’t move out of the home for more than 12 consecutive months.  

If you have more questions about how to use a reverse mortgage to pay for eldercare, please reach out to one of our reverse mortgage specialists or find a loan officer in your area.

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

The appeal of a reverse mortgage lies in its potential to provide a much-needed source of retirement income for those who may have limited pension or savings, helping them cover living expenses, medical costs, or other financial needs.  

Reverse mortgage counseling is a required step that plays a pivotal role in ensuring that individuals considering a reverse mortgage make informed and confident decisions, so they can be sure that a reverse mortgage is the right choice for them. 

In this article, we will cover everything you need to know about reverse mortgage counseling so you can feel comfortable navigating this unique requirement.  

Understanding Reverse Mortgages 

A home equity conversion mortgage (HECM), also known as a reverse mortgage, is a unique financial product designed for senior homeowners that allows them to convert a portion of their home equity into cash without having to sell or move out of their homes.  

While it is a loan like a traditional mortgage, the way it works is very different. In contrast to a traditional mortgage, where borrowers make monthly payments to the lender to gradually build equity and eventually own the home outright, a reverse mortgage works in reverse.  

First, the reverse mortgage loan will pay off your current mortgage, if you still have one. 

For the remaining equity, instead of making a monthly mortgage payment, homeowners receive the reverse mortgage proceeds from the lender, either as a lump sum, a line of credit, regular monthly installments, or a combination of these options. 

Homeowners are still responsible for paying for the property taxes, homeowners insurance, and maintenance of their principal residence. 

The loan is repaid when the homeowner permanently moves out of the home, sells the property, or passes away.  

Unlike traditional mortgages, credit and income qualifications are generally less strict for reverse mortgages, making them an appealing option for seniors seeking supplemental income during retirement.  

Reverse mortgages are backed by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD). 

The Role of Reverse Mortgage Counseling 

Reverse mortgage counseling is a mandatory educational program that HUD requires all prospective reverse mortgage borrowers to complete as part of the loan application process. It provides impartial guidance and ensures that applicants are well-informed before proceeding with their loan application. 

The counseling session aims to educate homeowners on the workings of a reverse mortgage, the features of the reverse mortgages, and important information they should consider.  

Additionally, the counselor will provide homeowners with detailed information to ensure that a reverse mortgage aligns with their specific situation. They will also inform homeowners about potential alternatives, such as a home equity line of credit (HELOC) or a home equity loan. 

The counselor will also provide helpful resources to assist homeowners in making an informed decision and provide support for the homeowners during the reverse mortgage process.  

The reverse mortgage counselors should not advise clients on whether or not to proceed with a reverse mortgage, nor should they recommend a specific reverse mortgage product. Their primary responsibility is to educate clients in an unbiased manner. 

Reverse Mortgage Counseling Requirements 

The reverse mortgage counseling session must be completed with a third-party HUD-approved counselor.  

While your loan officer can provide you with a list of at least five counseling agencies to contact, the reverse mortgage appointment has to be made by the homeowners. It cannot be made by the lender.  

Here is a list of required information that HUD mandates that the reverse mortgage housing counselors cover during the counseling session: 

• Homeowners’ needs and circumstances 
• The features and details of a reverse mortgage 

• Borrower responsibilities under a reverse mortgage 
• The costs of a reverse mortgage 
• Financial and tax implications of a reverse mortgage 
• Alternative options to a reverse mortgage 
• Information about reverse mortgage fraud schemes and elder abuse to be aware of 

Once the counseling session is complete, the certificate of completion will be sent to you rightaway. This can be done through email, fax, or traditional mail.  

You will need to provide the reverse mortgage counseling certificate to your lender before you can move forward with the reverse mortgage loan application.  

Final Thoughts

Reverse mortgage counseling is a required step for prospective applicants to navigate the complexities of obtaining a reverse mortgage. By participating in counseling, applicants can make informed decisions about whether a reverse mortgage aligns with their financial goals and circumstances.  

Remember to reach out to a HUD-approved counselor to schedule your counseling session and obtain the necessary certificate before moving forward with your reverse mortgage application. 

If you have more questions about the reverse mortgage process, reach out to one of our reverse mortgage specialists by filling out this form or through our loan officer directory.  

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

But before applying for a reverse mortgage, you will want to get an idea of how much you will be able to receive.  

The amount of money you can receive from a reverse mortgage is impacted by several factors and variables, which we detail below.  

Ultimately, to get the most accurate idea of how much you can get from a reverse mortgage, we recommend talking to one of our reverse mortgage specialists, who will be able to answer all of your questions.  

A Reverse Mortgage Explained

The home equity conversion mortgage (HECM), commonly referred to as a HECM reverse mortgage or HECM loan, is the most prevalent type of reverse mortgage. Other options include single-use reverse mortgages and proprietary reverse mortgages, such as the jumbo reverse mortgage, tailored to those with specific needs. 

Reserved exclusively for homeowners aged 62 or older, reverse mortgages hinge on the accumulation of substantial equity in the homeowner’s primary residence. It’s important to note that investment properties and vacation homes don’t meet the eligibility criteria for a reverse mortgage. 

A reverse mortgage can serve as a financial lifeline, enabling senior homeowners to tap into the equity of their homes without shouldering monthly payments, unlike a home equity loan or a home equity line of credit (HELOC). 

Upon obtaining a reverse mortgage, the first step will be to settle any outstanding traditional mortgage. Once that’s taken care of, homeowners have a range of choices regarding the remaining reverse mortgage proceeds. They can opt for a lump sum payment, monthly installments, a line of credit, or a combination of those options. 

Although a reverse mortgage can offer financial flexibility to older homeowners, it’s crucial to remember that certain responsibilities still rest on the borrower’s shoulders. These include paying property taxes, maintaining homeowners insurance coverage, and ensuring the home’s overall upkeep. 

Notably, the security of a reverse mortgage stems from its backing by the federal government. The U.S. Department of Housing and Urban Development (HUD) effectively regulates reverse mortgages, which is further insured by the Federal Housing Administration (FHA). Such measures aim to safeguard both borrowers and lenders. 

Age of the Youngest Borrower 

The age of the borrowers is considered one of the most important factors that affects how much borrowers are able to receive.  

To meet the eligibility criteria for a reverse mortgage, borrowers must reach the age of at least 62. However, when multiple individuals own the property, the borrowing capacity is contingent upon the age of the youngest homeowner. 

As a general rule, the older the borrower, the larger amount they will be able to receive.  

FHA Lending Limit 

Every year, the FHA determines the lending limit for HECM reverse mortgages. This is the maximum amount that homeowners are able to borrow from a reverse mortgage.  

The current lending limit for 2026 is $1,249,125. 

The principal limit is calculated with the lending limit as the baseline.  

For homeowners who have properties that are worth more than the FHA lending limit, several lenders do offer jumbo loans, which are propriety reverse mortgages that present an enticing option for borrowers seeking higher lending limits.  

These jumbo reverse mortgages have the potential to reach substantial amounts, soaring as high as $4 million. It’s important to note that jumbo reverse mortgages are solely supported by the lender, as they do not enjoy the backing of the FHA insurance found in other mortgage options.  

The Home’s Value 

With that in mind, one of the factors that will be considered is the current market value of the home.  

During the reverse mortgage application process, the lender will order an appraisal of your property. The appraised value of your home will be used to determine how much equity the home has accumulated, which is important for finalizing the total loan amount.  

Equity 

The equity is determined by making a simple calculation: take the current market value and subtract any money that is owed on the home. This may include the traditional mortgage or any other loans that may have been obtained such as a home equity loan or home equity line of credit (HELOC). 

The less money you owe on any such loans, the more equity that can be used for the reverse mortgage loan.  

There is not an exact amount or percentage of equity you need to obtain a reverse mortgage, but there will need to be enough money to pay off the current mortgage, if there is one, and the costs and fees that come with a reverse mortgage.  

Distribution Type 

Homeowners exploring reverse mortgages will have a range of options for how the funds are disbursed. This includes the option to receive their money through various avenues: a lump sum payment, fixed monthly payments, a line of credit, or a tailored combination of these options.  

The method chosen for receiving the funds can also influence the overall amount that one may receive. This element of flexibility allows homeowners to customize their reverse mortgage experience in a manner that best aligns with their unique financial goals and needs. 

Here are the options and how they each work in terms of payouts:  

• Lump Sum. The single disbursement lump sum payout is the only option that comes with a fixed interest rate. The being said, the lump sum option does come with a handful of limitations you will want to consider. 
• Monthly Payments. Borrowers have the choice between a tenure payment plan or term payment plan. Under the tenure plan, you will be able to receive payments for the rest of your life. The lender calculates the payments assuming you will live to 100 years old.  
• Line of Credit. Receiving funds as a line of credit may have the potential to give borrowers both the most flexibility and possibly the most amount of money. A line of credit allows homeowners to use the funds as needed. One of the advantages of a line of credit is that the untouched balance actually grows.  

Interest Rates 

Interest rates play a role in how much equity homeowners have access to: As reverse mortgage interest rates go up, it lowers the total principal amount available to be disbursed to borrowers. As interest rates go down, it means there is more principal available to be disbursed to the homeowner.  

The interest charged is paid back with the loan balance when the homeowners sell the home, no longer live in the home full time, or when the last remaining borrower passes away.  

Closing Costs and Other Fees 

When a reverse mortgage loan closes, borrowers do need to pay some closing costs that will also affect the total amount that homeowners receive.  

Alternatively, borrowers may also choose to pay for these costs out of pocket, which means that they will not impact the total loan amount.  

Reverse mortgage customers have the choice between four loan programs: a traditional reverse mortgage, a reverse mortgage for purchase, a reverse mortgage refinance, and a jumbo reverse mortgage.  

In this article, we will provide you with all the information you need to know about jumbo reverse mortgages so that you can know whether or not it is the right choice for you.  

Let’s dive in.  

What Is a Jumbo Reverse Mortgage? 

Jumbo reverse mortgages are proprietary reverse mortgage loans offered by some reverse mortgage lenders.  

It allows homeowners to borrow more than what is allowed with a traditional reverse mortgage. With a jumbo reverse mortgage, homeowners are typically able to borrow up to $4 million.  

They are offered by jumbo reverse mortgage lenders to those who have high-value homes. 

Jumbo reverse mortgages sometimes go by different names such as jumbo loans, jumbo reverse mortgage loan, jumbo reverse loans, and jumbo loans. 

Jumbo reverse mortgages are considered a proprietary product and therefore, given a white labeled name. For example, here are Mutual of Omaha Mortgage, our jumbo reverse mortgage is called the SecureEquity Reverse Mortgage. 

What is the Difference Between a Jumbo Reverse Mortgage and a Traditional Reverse Mortgage? 

The traditional reverse mortgage is known as the home equity conversion mortgage (HECM). This reverse mortgage is available to homeowners who are at least 62 years old and have specific levels of equity in their home in relation to the age of the youngest borrower.  

This reverse mortgage is backed by the federal government, which means that it is regulated by the U.S. Department of Housing and Urban Development (HUD) and insured by the Federal Housing Administration (FHA). 

Each year, the FHA sets a lending limit on how much homeowners can borrow with their reverse mortgage. The current maximum loan amount as of 2026 is $1,249,125. 

With a jumbo reverse mortgage there are some key differences. For example, in some states it is available to homeowners that are as young as 55 years of age. Jumbo reverse mortgages are not backed by any government agency. 

The limit on jumbo reverse mortgages typically tops at $4 million, although the exact amount may vary depending on the lender you decide to work with.  

At Mutual of Omaha Mortgage, our SecureEquity Reverse Mortgage allows qualifying homeowners to borrow up to $4 million. 

Benefits of a Jumbo Reverse Mortgage 

The primary benefit of a jumbo reverse mortgage is that homeowners can borrow more than the FHA lending limit.  

Another potential benefit is homeowners may be able to access it before 62 – in some cases as young as 55 years of age. However, this change will vary depending on the lender and the state where you live.  

In addition, jumbo reverse mortgages do not require borrowers to pay mortgage insurance premiums, which can be a hefty cost that comes with traditional reverse mortgages. A mortgage insurance premium is typically paid at closing, and then it is also an ongoing annual cost that must be paid throughout the life of the loan. 

There are also protections that come with jumbo reverse mortgages that are similar to the protections that traditional reverse mortgages are afforded as FHA-insured loans.  

For example, just like a traditional mortgage, jumbo reverse mortgages are also a non-recourse loan, which means that borrowers will never owe more on the loan than the appraised value of your home.  

Traditional reverse mortgages limit how much a borrower can receive in the first year to 60 percent of the total loan amount. With a jumbo reverse mortgage, borrowers can receive 100 percent of the total loan amount in the first year.  

How a Jumbo Reverse Mortgage Works 

A jumbo reverse mortgage works in a similar way to a traditional reverse mortgage. A jumbo reverse mortgage pays off the current conventional mortgage on the home, if there still is one.  

For the remaining loan proceeds, borrowers will receive that money as a lump sum.  

Homeowners are obligated to pay the property taxes, homeowners insurance, keep up on home maintenance requirements, and keep the home as the primary residence.  

The loan is paid back once the homeowners decide to sell the home, it is no longer their primary residence, or they fail to meet the requirements detailed above.  

The Jumbo Reverse Mortgage Loan Process 

The first step in obtaining a reverse mortgage is to talk to one of our reverse mortgage specialists to find out if you qualify. 

Next, applicants will need to complete a counseling session with a third-party counselor approved by the U.S. Department of Housing and Urban Development (HUD).  

After receiving a certificate of completion from the counseling session, the homeowners may then file their application which will also include submitting several required documents.  

The application will then be processed and sent to underwriting.  

Underwriting will finalize and approve the loan. Once this is done, a closing date will be set. Once the closing documents are signed, the borrowers can start receiving their funds in the method they chose during the application process.   

Borrowers can cancel the loan at any time, including three days after signing the closing documents.  

Please note that the jumbo reverse mortgage application process can take up to 45 days to complete from application to closing.  

Jumbo Reverse Mortgage Eligibility Requirements 

In order to qualify for a jumbo reverse mortgage, you need to meet the following requirements:  

• Age Requirements. You must meet the age requirement, which may vary from 55 years of age to 62, depending on the lender and the state where you live.  
• Primary Residence. The home you want to get a reverse mortgage for must be your primary residence, which means you live in it most of the year.  
• Property Type. The property must be a single-family home, a qualifying condominium, a townhome, or a multi-family residence with one to four units in which the homeowners live in one of the units.  
• Maintenance. The home must be in good, maintained condition.  

• Taxes. You must be up to date on the property taxes and be able to continue to pay the property taxes.  
• Homeowner’s Insurance. You must also be up to date on your home insurance premiums and be able to continue to pay the premiums.  
• Other Fees. You must also be current on other fees such as homeowner’s association (HOA) fees.  

When Is the Jumbo Reverse Mortgage Repayable? 

A jumbo reverse mortgage is paid back when the homeowner decides to sell the home, the home is no longer the primary residence of the homeowner, or if the homeowners are no longer able to meet the obligations of the loan such as paying the property taxes or the homeowner’s insurance.  

Homeowners may also make payments toward the loan balance at any time without facing any penalties.  

 
Pros and Cons of a Jumbo Reverse Mortgage  

Just like any major financial decision, it is important to weigh the pros and cons, so you are an informed consumer. Here are the pros and cons of a jumbo reverse mortgage:  

Pros: 

• Protections. Jumbo reverse mortgages come with several protections that are like traditional reverse mortgages. These include non-recourse benefits and protections for non-borrowing spouses. 
• Loan Amount. Consumers who qualify for a jumbo reverse mortgage are able to borrow more than allowed with a traditional reverse mortgage, which is limited to the current FHA lending limit of $1,249,125 for 2026. 
• Fund Access. With a traditional reverse mortgage, borrowers are not permitted to receive more than 60 percent of the total loan proceeds in the first year. With a jumbo reverse mortgage, borrowers may access 100 percent of the loan proceeds in the first year.   
• No Mortgage Insurance Premium. Jumbo reverse mortgage borrowers do not have to pay mortgage insurance premiums as required by traditional reverse mortgages.  
• Flexibility. Just like traditional reverse mortgages, the proceeds from a jumbo reverse mortgage can be used however you want.  

• Fixed Rates. All jumbo reverse mortgages come with fixed interest rates.  

Cons: 

• Not FHA Insured. Since jumbo reverse mortgages are private loans, they are not FHA insured like traditional reverse mortgages. Your reverse mortgage specialist will help you understand the loan terms and the protections we offer here at Mutual of Omaha Mortgage.  
• Inheritance. Because a jumbo reverse mortgage is a loan borrowed against the equity of the home, it also means that there will be less to leave to your heirs. You can still leave the home to your heirs, but they will need to pay off the reverse mortgage by either paying for it in cash or taking out a traditional mortgage.  
• Fewer Options for Receiving Money. The funds from a jumbo reverse mortgage can only be received as a lump sum. By comparison, a traditional reverse mortgage can also be received as monthly payments or a line of credit.  

Final Thoughts 

A jumbo reverse mortgage can be a viable option for homeowners who are looking to access more funds than is allowed with a traditional reverse mortgage. With the ability to borrow up to $4 million, homeowners can tap into their home equity and use the funds as they see fit.  

Additionally, jumbo reverse mortgages offer certain benefits such as no mortgage insurance premiums and the ability to receive 100 percent of the loan proceeds in the first year.  

However, it’s important to carefully consider the pros and cons before making any major financial decision.  

If you’re interested in exploring a jumbo reverse mortgage further, reach out to one of our reverse mortgage specialists to discuss your options and eligibility by calling the phone number here or finding a loan officer in your area.  

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

One program that makes relocating with a reverse mortgage possible is the Home Equity Conversion Mortgage for Purchase (HECM for Purchase), also known as a reverse mortgage for purchase or H4P.  

The HECM for Purchase program enables borrowers to use a reverse mortgage loan to finance a portion of their new home purchase. But how does it work? 

How Does a HECM for Purchase Work?   

When buying a home, you usually have two options: pay cash or make a down payment and finance the rest with a traditional mortgage. With a HECM for Purchase, you have a third option.  

HECM for Purchase borrowers typically make a large down payment, around 50%, and finance the remaining balance through a reverse mortgage. This allows you to use the money you would have used to buy the house to do other things while still owning the home. And for the amount that is financed with the reverse mortgage, no monthly mortgage payments are required.  

With a traditional reverse mortgage, you receive cash in the form of a lump sum, line of credit, and/or monthly payments. However, with a HECM for Purchase, you can use that money to purchase a new principal residence while the remaining reverse mortgage proceeds goes to the borrower. 

If you plan to get a HECM for Purchase, you will need to connect with a lender who specializes in these loans. It is also recommended that you contact a real estate agent who works with the HECM for Purchase product. Your HECM loan officer may be able to help connect you with one.  

Mutual of Omaha Mortgage has several loan officers who specialize in the HECM for Purchase program. Go here to find one in your area.

Who is a HECM for Purchase for?   

A HECM for Purchase may be a good option for those who are planning to relocate, downsize, or upsize in retirement. This option has several advantages over paying for the entire home purchase with cash.  

First, it allows retirees to keep more of their nest egg, which is important as they head into retirement. Second, it makes it easier to qualify for a nicer home than you might without it. Third, it reduces monthly costs since you will no longer have a monthly mortgage payment. Last, it’s an excellent option for those who want to move into a new home and remain there as they age. 

While most retirees tend to retire in place, there are several reasons why retirees may want to move, including the following:  

• Their current home may be more house than what they need, and they want to downsize.  
• Their current home may be too expensive to maintain, or they want to live in a retirement community.  
• They may want to move closer to their family  
• Their neighborhood may not be as safe as it was when they first bought it years ago, and they want to move to a safer community.  

• They may want to move to a warmer climate  
• They may want to upsize. According to a study by Merrill Lynch and Age Wage, 49% of retirees don’t downsize, and 30% purchase larger homes when they buy a new home in retirement. 

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

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A reverse mortgage has emerged as a valuable retirement tool for homeowners aged 62 and above. Unlike traditional mortgages, a reverse mortgage allows homeowners to convert a portion of their home equity into cash without the need for monthly mortgage payments.  

But what can a reverse mortgage be used for? In this article, we will explore the diverse range of possibilities that a reverse mortgage offers, enabling retirees to enhance their retirement years and achieve their unique financial goals.  

Let’s dive in.  

What are the Reverse Mortgage Requirements? 

Reverse mortgages have distinct requirements that differ significantly from traditional mortgages. Here are the key points to consider: 

• Age. To qualify for a HECM reverse mortgage, at least one of the homeowners must be 62 years of age or older.  
• Residency. The home designated for the reverse mortgage must be the primary residence of the homeowners. It is not possible to obtain a reverse mortgage for a second home or an investment property. 
• Equity. Homeowners are required to have equity accumulated in their home to be eligible for a reverse mortgage. The exact amount will vary depending on the lender and the current interest rates.  

• Property Type. The eligible property types for a reverse mortgage include single-family homes, two-to-four-unit properties where the homeowners occupy one of the units, townhouses,
  FHA-approved condominiums, or manufactured homes that meet HUD’s requirements. 
• Maintenance and Fees. The home must be well-maintained and in good condition. Homeowners are responsible for the ongoing maintenance of the property, as well as paying property taxes and insurance. 

FAQs 

Can you withdraw money from a reverse mortgage? 

It depends on how you opt to receive your funds. Your choices are to receive your funds as a lump sum, monthly payments, or a line of credit. If you choose to receive your reverse mortgage funds, yes, you are able to withdraw money from your reverse mortgage.  

What is the most common use of a reverse mortgage? 

Most reverse mortgage customers use the funds to cover basic needs such as covering monthly expenses or to cover other more immediate needs such as paying off consumer debt, according to the National Council on Aging (NCOA).  

The goal for reverse mortgage borrowers when taking out a HECM loan is to make it possible for them to stay in their current home longer, NCOA added.  

While there are no rules about how reverse mortgage funds must be used, they are not typically used for travel or similar discretionary costs.  

Is money from a reverse mortgage taxable? 

A reverse mortgage is a loan, so it is not considered income. For this reason, the money received from a reverse mortgage is not taxable.  

Virginia woman Marjorie Fox told The New York Times that one of the reasons she decided to get a reverse mortgage even though she had significant retirement savings is because if she found that she needed extra cash for a specific reason, she would rather take the money from her tax-free reverse mortgage line of credit than her IRA where she would have to pay taxes on withdrawals.  

What are the restrictions on a reverse mortgage?  

As mentioned previously, there are no restrictions on how reverse mortgage funds can or can’t be used.  

That being said, there are obligations that must be met in order to continue to keep the loan. These obligations include keeping the home as the primary residence, staying up to date on property taxes, paying homeowners insurance, and any HOA fees, if required.  

What is the maximum amount you can get from a reverse mortgage? 

The Federal Housing Administration (FHA) sets a lending limit for HECM reverse mortgages every year. The current FHA lending limit for 2026 is $1,249,125.  

The amount you will be able to borrow will depend on a combination of factors such as the home value, the age of the oldest borrower, and the interest rate.  

If you have a home that has more equity than the FHA lending limit, several major reverse mortgage lenders, including Mutual of Omaha Mortgage, offer a proprietary reverse mortgage, also known as jumbo reverse mortgages, that typically allows homeowners to borrow up to $4 million.  

Final Thoughts 

In conclusion, a reverse mortgage is a versatile financial tool that offers numerous possibilities for homeowners aged 62 and above. It allows retirees to enhance their retirement years and achieve their unique financial goals.  

With a reverse mortgage, homeowners can supplement their retirement income, make home renovations or repairs, pay off credit card debt or personal loans, cover healthcare costs, fulfill their travel aspirations, and even purchase a new home through the HECM for purchase program.  

The funds acquired through a reverse mortgage can be received as a lump sum, monthly payments, or a line of credit, providing flexibility and convenience. It’s important to note that reverse mortgage funds are not subject to taxation, offering additional financial benefits.  

While there are obligations to be met, such as maintaining the property as the primary residence and keeping up with property taxes and insurance, a reverse mortgage can be a valuable tool for older homeowners seeking stability and financial freedom in their retirement years. 

Before taking out a reverse mortgage, it is always recommended that you discuss this decision with your family members and financial advisor. 

For more information, grab our free info guide here.

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

Related Posts:

• Is a Reverse Mortgage a Good Idea?

• How to Apply for a Reverse Mortgage

• Reverse Mortgage vs HELOC: Which One is Best for Accessing Equity?