#262: Reverse mortgages — Planning Options for Senior Clients

By: John Metcalf

October 13, 2025

HECM V. HELOC – THE 3 BIG DIFFERENCES THAT MAKE THE DIF FOR SENIORS

At any age, clients’ housing wealth represents a financial resource for them, along with their investment accounts, their rental properties, and their cash reserves. At different times in their lives, your financial planning clients may have chosen to tap the value in their home to fund home improvements, make new investments, launch business ventures, make charitable gifts, or help family members. Pre-retirement, tapping into housing wealth is typically accomplished by clients in one of three ways:

a home equity loan (a lump sum loan with payment installments, a fixed interest rate, and a fixed period of time for repayment).
a cash-out refinance – replacing their mortgage with a new, larger loan, clients receive the difference in cash.
a home equity line of credit, or HELOC. This is a revolving line of credit (typically with a variable interest rate), from which the client can draw as needed.

As your clients move into retirement, particularly for those who have made a decision to “age in place” rather than moving to a retirement community, the tie between their planning and their housing wealth takes on greater significance than ever before. For seniors who are “house rich, cash poor”, home equity represents a resource to help them cope with unforeseen repair costs or medical bills. For other senior borrowers, knowing they will be in a position to help children facing medical emergencies — or grandchildren facing college debt — makes having ready access to funds a reassuring prospect. At the same time, these retired clients can hardly afford to take on debt repayment schedules, which is why a HECM (Home Equity Conversion Mortgage) can represent the ideal compromise.

Being careful to explain that reverse mortgage financing is outside your own area of expertise as an advisor, (your clients would need to work with a reverse mortgage specialist), it’s important for you to understand the three most important differences between a HELOC and a HECM in relation to retirees’ best use of their resources.

A HELOC is a recourse loan (the lender can pursue the borrower if the home’s value is insufficient to satisfy the debt); a HECM reverse mortgage is non-recourse, meaning that should the loan balance exceed the property value, the FHA insurance will covers the difference; the only security for repayment is the home itself).
With a HELOC, borrowers must make at least minimum monthly mortgage payments* to avoid late fees and protect their credit score. No monthly mortgage payments* are mandatory on a HECM reverse mortgage. In a HELOC, you do not earn interest or see “growth” on un-borrowed equity.

On a HECM reverse mortgage, any un-borrowed portion of the line of credit grows at the same rate as the interest rate charged on borrowed funds. (This happens regardless of the home’s value at that point in time.)

For senior borrowers, those three differences can mean a lot!

https://mutualreverse.com/david-garrison

*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. David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender

#261: Reverse mortgage to render housing wealth spendable

By: John Metcalf

October 13, 2025

PREPARING RESOURCES NOW FOR SPENDABILITY LATER

While you’re not planning to sell your home, having decided years ago that aging in place would be the best course of action, you had rejoiced in the fact that, over the past few years, the market value of your home had increased substantially. In fact, using a home equity line of credit (now three months away from being completely paid off), you were able to finance new HVAC, replace the roof, and create a ground-floor bed and bath.

A divorcee now entering your seventies, you’ve been able to generate part time income to supplement a small pension and social security, and, until now, you’ve avoided taking withdrawals from your individual investment account. While you realize you’ll need to take IRA withdrawals in a couple of years, you have not touched that money until now.

Because you want to preserve the chance to tap the value in your home again should it ever become necessary, it worries you to read that homes in Indiana have begun to stay on the market longer, signaling that the big price “boom” may be over. Meanwhile, along with everyone else, your living costs have risen (you’ve already received notice from your pharma plan of bigger co-pays). Without being too “paranoid,” you’re trying to be smart about “gearing up” to remain financial self-sufficient in the years to come.

Since your plan is to continue occupying your home, you might consider converting your “housing wealth” (home equity) into a contingent source of spendable income using a reverse mortgage set up as a “line of credit.” This move would address two of the concerns you mention in looking towards the future:

a) Should stagnation or even a decline in the value of your home come to pass in the future, even were the reverse mortgage balance to exceed the property value, neither you (nor your heirs) would ever be liable for the deficiency.

b) If and when you take withdrawals from the line of credit, the money will be tax-free.* What’s more, the unused portion of your equity will be growing at the same rate as that being charged on the loan.

A reverse mortgage can be a way for you to prepare your housing resource now for “spendabillity” later.

https://mutualreverse.com/david-garrison

*Please consult a tax advisor. David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender

#260: Reverse mortgage – bringing reliability to the budget

By: John Metcalf

October 13, 2025

“PENSIONING” HOUSING WEALTH

Seven years ago, you took advantage of an early retirement offer from the manufacturing facility where you’d been employed for most of your working life. Given the choice to receive a pension for the rest of your life or to “walk away” with a lump sum, you chose the latter. Your thinking was two-fold: you’d enjoyed directing the money in your 401K, moving among the different funds, and were not afraid of continuing to be involved in making investment choices. Truth be told, you were reluctant to trust your future to a company undergoing financial troubles.

While satisfied that you made the right decision about the pension, you’re now in the process of considering the future. In the early years of retirement, you’d been able to bring in some income from temporary jobs, but that has become too physically taxing to be reliable in terms of income. You do have less than a year to go on the mortgage on your well-maintained home, where you plan to continue to spend the rest of your life.

As you approach “normal” retirement age, you will be “turning on” your social security payments early next year. While you still enjoy “playing the market” in your individual investment account, with the IRA funds, you want to be less vulnerable to market fluctuations and are considering converting a large part of that account into one or two fixed annuities. You realize that income will be fully taxable, but, given your concern about the rise in gasoline and car repairs, utilities, and even groceries, having a fixed monthly income, guaranteed for life, in addition to the Social Security benefits, seems very appealing.

As you move into the second phase of retirement, planning to “age in place” while giving thought to stabilizing your income stream, you might consider “pensioning” your own housing wealth. A government-guaranteed tenure reverse mortgage is a way to “annuitize” the equity you’ve built up in your home. So long as you are still occupying your home, keeping up with homeowner’s insurance, property taxes, and home repairs, you will receive equal monthly mortgage payments* for the rest of your life (the concept is similar to the fixed insurance company annuities you’re considering). Those income payments will continue regardless of either positive or negative future changes in the value of your home.

You’ll certainly want to consult your advisors – along with your prospective heirs, before committing to such a plan, but the reverse mortgage will allow you to keep more of your IRA Rollover funds in the market while stabilizing your monthly inflow of cash.

While, seven years ago, you chose to take a lump sum, it might now be appropriate to choose the “pension option” in the form of a tenure reverse mortgage on your home.

https://mutualreverse.com/david-garrison

Equal Housing Lender

Why HECMs Belong in Retirement Plans

By: John Metcalf

October 2, 2025

A Strategic Tool for Managing Longevity, Market Risk, and Liquidity

Bob Tranchell, RICP®

Home Equity Retirement Specialist | Mutual of Omaha Mortgage

The Overlooked Asset in Retirement Planning

As of Q2 2024, baby boomers collectively hold more than $17 trillion in home equity

(HousingWire, 2024). Despite this, financial advisors often treat housing wealth as a legacy

asset or last resort rather than a strategic component of retirement planning. This traditional

view overlooks an essential fact: home equity is one of the few assets that can be

accessed without reducing portfolio growth, income generation, or lifestyle flexibility.

Through the Home Equity Conversion Mortgage (HECM), advisors can unlock this dormant

asset to provide their clients with stability and control.

HECM Defined

The HECM is an FHA-insured home equity loan available to homeowners age 62 and older.

Unlike traditional loans, it offers flexible repayment options, a line of credit that grows annually

regardless of home value, and tax-free* proceeds (*consult tax advisor). As a result, the HECM

is less a borrowing tool and more a risk management and planning instrument, particularly

relevant in the distribution phase of retirement.

Managing Sequence of Returns Risk

One of the greatest threats to portfolio sustainability is sequence-of-returns risk—the danger

of experiencing market downturns early in retirement. Research has consistently shown that

incorporating home equity can significantly improve retirement outcomes:

• Pfau (2015): Coordinating withdrawals with a HECM line of credit improved the probability of

portfolio success compared to relying solely on investment assets.

• Evensky (2016): Using home equity as a “buffer asset” increases survivability of the

portfolio, allowing more aggressive equity allocations without increasing risk.

• Giordano (2016): Positioning home equity early—rather than as a last resort—creates a

reserve asset that enhances flexibility during volatile markets.

Applications in Comprehensive Retirement Planning

HECMs are uniquely adaptable and can address multiple planning challenges:

• Healthcare & LTC Planning: Fund premiums, reduce premiums, or create a self-insurance

reserve.

• Social Security Optimization: Bridge income to delay benefits to age 70.

• Tax Efficiency: Support Roth conversions, reduce provisional taxation, provide liquidity for

capital gains strategies.

• Housing Transitions: Downsize, upsize, or lateral moves without depleting portfolios.

• Cash Flow Relief: Eliminate mortgage payments to improve lifestyle and security.

The Paradigm Shift for Advisors

The old paradigm positioned HECMs as a last resort. The new paradigm recognizes home

equity as a core asset class within retirement planning. By incorporating HECMs early,

advisors can improve portfolio longevity, enhance tax efficiency, and deliver higher confidence

to clients.

As Harold Evensky, Ph.D., noted in the Journal of Financial Planning:

“Our studies indicate this will significantly increase the survivability of the portfolio in

retirement.”

Conclusion

For financial planners and RICPs, integrating HECMs is no longer optional—it’s a professional

responsibility. Ignoring $17 trillion in client assets risks leaving strategies incomplete. By

treating home equity as a strategic reserve, advisors can deliver holistic, resilient, and

tax-efficient retirement plans.

Bob Tranchell, RICP®

Home Equity Retirement Specialist

[email protected] | 833-411-HECM (4326)

Citations

• Wade Pfau, *Incorporating Home Equity into a Retirement Income Strategy*, Journal of

Financial Planning, 2015.

• Harold Evensky, Ph.D., Journal of Financial Planning, Editorial Review Board.

• Shelley Giordano, *An Alternative Buffer Asset*, Retirement Management Journal, 2016.

• HousingWire, *The Silver Tsunami: Housing Wealth Will Mostly Stay in the Family*, 2024.

• Journal of Financial Planning, *Healthcare Costs Lead Planners’ Concerns About Clients’

Retirement Security*, March 2025.

*Please consult a tax advisor.

Bob Tranchell, NMLS ID 286716. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Connecticut Mortgage Lender License ML-1025894. Florida Mortgage Lender Servicer License MLD1827. Maine Supervised Lender License 1025894. Massachusetts Mortgage Broker and Lender License MC1025894. Licensed by the New Hampshire Banking Department, Mortgage Banker License 1025894MB. Licensed by the New Jersey Banking and Insurance Department. New Jersey Residential Mortgage Lender License 1025894. Pennsylvania Mortgage Lender License 72932. Rhode Island Lender License 20163229LL. Rhode Island Loan Broker License 20163230LB. Virginia Mortgage Broker and Lender License, NMLS ID #1025894 (www.nmlsconsumeraccess.org). These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender

Realtors, Unlock New Revenue Streams this Year!

By: John Metcalf

September 26, 2025

Mary Jo Lafaye

Reverse Mortgage Specialist | Helping Homeowners 55+ Unlock Retirement Income | Trusted Advisor to Financial & Legal Pros | Speaker & Educator

Learn How Reverse Mortgages Help You Grow Your Business and Help Senior Homebuyers Downsize to their Retirement Dream Home

Are you a Realtor looking to get more listings and grow your real estate business? Did you know the fastest-growing group of homebuyers and sellers is adults aged 55 and older? By aligning your services with the unique needs of this demographic, you can tap into a powerful and often overlooked market segment—while leveraging the benefits of the FHA’s newly enhanced HECM Lifestyle Loan, a modern version of the traditional reverse mortgage, customized as a purchase tool.

As more boomers and seniors consider downsizing, upsizing, or relocating for retirement, Home Equity Conversion Mortgages (HECMs)—the most popular type of reverse mortgage, insured by the FHA—can transform your business model and boost client satisfaction.

What Is a Reverse Mortgage Lifestyle Loan?

A federally regulated reverse mortgage, when used as a purchase loan, enables home buyers aged 55+ to boost their home purchasing power, without making monthly mortgage* payments during their golden years.

Instead of paying the bank, the interest accrues, creating more liquidity throughout retirement, and decreasing the likelihood that homeowners will run out of money in later years.

Key features of reverse mortgages:

– The homeowner retains the title and can sell or refinance at any time

– No pre-payment penalty

– No monthly mortgage payments* required

– Non-recourse loan (no personal liability for borrower or their heirs)

Why Real Estate Agents Should Pay Attention

As a trusted advisor during major life transitions, Realtors are uniquely positioned to introduce reverse mortgage options like the HECM for Purchase—also known as the FHA Lifestyle Loan.

Benefits for Your Real Estate Clients:

Expand Buying Power: Help clients use a reverse mortgage to purchase a new home with no monthly mortgage payments—ideal for retirees looking to downsize, relocate, or even upgrade.

Overcome Financial Barriers: Seniors unsure about retirement finances may delay a move. A reverse mortgage can provide confidence and liquidity, helping you close more sales.

Real-Life Scenarios Where Reverse Mortgages Close Deals

A widowed homeowner with limited income wants a modern, low-maintenance home in the same community. She needs additional funds to buy local.

A senior couple wants to move closer to grandchildren but needs an extra $400,000 for their next home—without taking on monthly mortgage* debt.

A retired couple wants to upsize to a dream home by the water with great walkability but doesn’t qualify for a conventional mortgage.

In all these cases, a reverse mortgage for purchase offers a solution—and opens doors to more closed transactions.

Consumer Protections for Peace of Mind

HECM loans are federally insured and come with built-in safeguards, including:

– Mandatory HUD-approved third-party counseling

– Three-day right of rescission

– Non-recourse loan terms

– Protections for eligible non-borrowing spouses

The Takeaway: More Value for Clients, More Closings for You

When you understand how to incorporate reverse mortgages into your real estate toolkit, you become more than just a Realtor—you become a strategic partner and advocate for your clients’ retirement lifestyle.

Want to learn how reverse mortgages can grow your real estate business while serving the senior market?

Let’s connect for a free consultation. Email me at [email protected] or send me a LinkedIn note.

Written by Mary Jo Lafaye Home Equity Retirement Specialist | NMLS #246222

*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.

Mary Jo Lafaye, NMLS ID 246222. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Licensed by the Department of Financial Protection & Innovation under the California Residential Mortgage Lending Act, License 4131356. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender

The Future of Reverse Mortgages — Here’s Dorothy’s Success Story

By: John Metcalf

September 26, 2025

Mary Jo Lafaye

Reverse Mortgage Specialist | Helping Homeowners 55+ Unlock Retirement Income | Trusted Advisor to Financial & Legal Pros | Speaker & Educator

Dorothy* was happy and secure and loving her busy married life in Marin County. She married her college sweetheart David and they were still a perfect match 46 years later. They raised four children together and enjoyed all the same things: playing tennis, traveling to Europe twice a year and having dinner parties with friends. She was already making plans for their golden wedding anniversary party.

So Dorothy was devastated when her husband came home from golf one day and asked for a divorce. He had met someone new and wanted to move out of the country.

Suddenly, she was single at age 72. More than anything, Dorothy wanted to stay in the home where she raised her children, and keep living in her community with her neighbors, church and friends.

But how? She hadn’t worked in decades and she didn’t have enough income to cover her living expenses, and pay for property taxes, insurance and maintenance on the aging house.

Exploring the New Reverse Mortgages

Dorothy’s financial advisor suggested she look into options with reverse mortgages. He explained that the old “reverse annuity mortgages” of the 1980s weren’t really mortgages at all. They were an insurance product that consisted of a high-interest loan, a forced annuity purchase — and the insurance company lender got 50 percent of the borrower’s home appreciation! Those aren’t around any more.

Today’s new FHA-backed reverse mortgages are flexible options designed to help older homeowners like Dorothy have a secure retirement by using some of the equity from her home for living and healthcare expenses.

Dorothy’s home appraised at $1.2 million. I talked to Dorothy about all the different options and she decided to go with a Jumbo Homesafe mortgage, a proprietary mortgage from my company, Retirement Funding Solutions. It’s designed for homes worth $850,000 or more and she closed at a rate of 5.99%.

She took out $444,000 in equity, and used $400,000 to buy out her husband’s half of the home. She used the remaining $44,000 to pay for needed home repairs and add to her nest egg.

She got to keep her home — and her low property tax rate under Proposition 13.

And Dorothy doesn’t have to make any monthly mortgage payments,** as long as she stays in her home and pays all the property tax, insurance and maintenance costs. If she decides to sell her home in 10 years at age 82, the debt will be $820,000. On the up side, even if her home appreciates just 4 percent a year, her net equity will be $200,000 higher than it was when she took out her original Jumbo Homesafe loan.

And her half of the couple’s investment portfolio goes to maintaining the lifestyle she had before her divorce. She had so much extra space at home, a friend moved in with her, and that rental income pays for expenses like homeowners insurance and utilities. These days, Dorothy is creating her new life and feeling like her financial future is golden, all on her own.

To hear more of my client success stories and learn about using your home equity for retirement, call me today at 415-259-4979 or email [email protected] NMLS #246222

*Not her real name.

**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.

Equal Housing Lender

Helping Your Clients Downsize in Marin County? Don’t Overlook the Power of the FHA’s Lifestyle Loan Home Mortgage

By: John Metcalf

September 26, 2025

Mary Jo Lafaye

Reverse Mortgage Specialist | Helping Homeowners 55+ Unlock Retirement Income | Trusted Advisor to Financial & Legal Pros | Speaker & Educator

In Marin County’s high-priced real estate market, many homeowners over age 60 are sitting on a goldmine of home equity—but feel stuck when it comes to Making a Move. As their Trusted Real Estate Advisor, you’re in a unique position to guide them through the transition from a larger family home to a new one-level, perhaps walkable, and more manageable home.

The Challenge: Retiring clients don’t want to take on a new mortgage payment, and they certainly do not want to take money from their taxable retirement accounts.

The Industry Secret: There is little know tool that can help your mature buyers get the home they really want and improve their financial picture for decades to come. Enter the downsizing tool extraordinaire, the often overlooked Home Equity Conversion Mortgage (HECM) for Purchase, otherwise known as the

FHA’s Lifestyle Loan.

What is the Lifestyle Loan

The Lifestyle Loan (LL) is a type of FHA-insured payment-deferred mortgage that allows homeowners age 62+ to purchase a new home using a combination of a down payment (from the proceeds of the home sell for them) along with a non-recourse retirement-focused loan, which requires no monthly mortgage payments* (as long as they live in the home and meet basic requirements). The Lifestyle Loan can be a game-changer for clients who want to downsize, stay in California, and retain financial flexibility and liquidity.

The Marin Market Reality, “If I sell, where will I go?”

In Marin, where the median home price far exceeds $1 million, many older homeowners have considerable untapped equity—and they love the idea of moving to something with a smaller yard, newer amenities, and even located closer to their favorite shops and cafe’s for a more mobility-focused lifestyle.

Yet, once they sell, pay off a large remaining mortgage balance, and possibly incur federal and state capital gain taxes; they may not have quite enough cash to get the next house that inspires them to Make a Move.

Once Boomers and Seniors learn about this federally-insured and non-recourse Lifestyle Loan, with Minimal Income and Credit Requirements, they can see a path toward getting their dream home without breaking the bank.

If you are talking to potential sellers and hearing these concerns, you should think of the Lifestyle Loan as the answer:

– Where will I go? Will I be able to stay local, in Marin, or at least nearby?

– Will I be able to afford a new home without tapping my retirement savings?

– What if I want to preserve cash flow and still live comfortably?

– Can I age in place and enjoy the proceeds from selling my current home?

As a trusted Real Estate Advisor, assembling your team to help address these fears and offer creative solutions that align with your clients’ lifestyle goals is crucial to increasing your sales.

Here is a Real-Life Scenario

Imagine this: You help your 70-year-old clients, Jim and Velma, sell their long-time Mill Valley home for $2.3M.

– They pay off their mortgage and HELOC of $1.1M.

– Sale fees and capital gain tax = 250k.

– Total cash in hand after sale is $850,000.

They want to stay as close to family and friends as possible, and they need a garage for Jim’s Big Band to practice every weekend.

They set out on their home shopping adventure and find just the right one-level home, recently remodeled and walkable to the Farmer’s Market, YAY!!!

Oops, the price tag is $1.2M and they do not want a mortgage payment to ruin their retirement cash flow. Their financial advisors recommends NOT taking money from their investment accounts to supplement their cash. NOW WHAT?

Enter the Lifestyle Loan: Jim and Velma can put down ~$800K (typically 40–60% of the purchase price, depending on age and rates), and use the FHA Lifestyle Loan to finance the rest—no monthly mortgage payments required.

Jim and Velma have money left over to add some solar and buy a new Prius. Life is good!

Why This Matters for You

Helping clients access this kind of financing solution:

– Creates new purchase opportunities in a competitive market

– Builds trust and long-term referrals

– Opens the door to double-sided transactions (sell + buy)

– Sets you apart as an innovative and compassionate advisor

Partner with a proven Lifestyle Loan Specialist

As a Marin-based Home Equity Retirement Specialist with 20+ years of experience, I collaborate with Real Estate Professionals to educate and support buyers throughout the Downsizing process. I’m here to:

– Help pre-qualify your clients for H4P financing. We fully underwrite the borrowers before they start making offers. This enables us to close in 30 days.

– Join you in client meetings to answer questions

– Host co-branded educational workshops or webinars

Let’s work together to create more opportunities for our clients to live securely, comfortably, and with confidence. Reach out to find a time to talk.

Mary Jo Lafaye, Marin County Home Equity Retirement Specialist NMLS #246222

www.maryjolafaye.com | [email protected] | (415) 259-4979

*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.

Equal Housing Lender

High Mortgage Rates Are Holding Seniors Hostage—Here’s How to Break Free

By: John Metcalf

September 26, 2025

Mary Jo Lafaye

Reverse Mortgage Specialist | Helping Homeowners 55+ Unlock Retirement Income | Trusted Advisor to Financial & Legal Pros | Speaker & Educator

The 6.7% Mortgage Rate Problem

Today’s average 30-year mortgage rate hovers around 6.72%, a stark contrast to the sub‑3% rates many seniors locked in years ago. As coastal homeowners age, this “rate lock” can trap them in a home that no longer fits their needs—or their retirement plan.

Already, 31% of homeowners aged 65 to 79 still carry mortgages—a sharp increase from just 24% in 1989. With rising costs, many feel stuck.

Why Downsizing Feels Risky Now

Downsizing used to be a reliable path to financial freedom. Sell your $2M home, buy a $1.5M house, pocket the equity—and simplify life.

But swapping a 2–3% mortgage for a 6–7% one changes the math—and the emotions.

That’s why financial experts now caution: look beyond the mortgage. Consider taxes, insurance, maintenance, HOA fees—and even harder-to-quantify costs like moving stress.

Many clients think, “Maybe I’ll just stay put.” But that often means sacrificing the lifestyle they built—and deserve.

Your Better Path: The Lifestyle Home Loan

That’s where the FHA-insured “HECM for Purchase”, aka the Lifestyle Home Loan, comes in.

Key benefits for clients Age 55+ in Marin and beyond:

– No new monthly mortgage payments*, free up cash for other needs and wants

– Keep your housing wealth working for you. Buffer market volatility for long term growth

– Avoid tapping retirement savings when values are in decline; use your FHA credit line while stocks recover

– Align with desired lifestyle—newer, low maintenance home, simpler life, local community

MJ’s Smart-Start 3-Step Process:

– Full Housing Cost Breakdown We evaluate current mortgage, property expenses, and the emotional costs of staying vs. making a move.

– Creative Downsize Blueprint We structure a combined home-equity + reverse-mortgage purchase—so clients can right-size without using all their sale proceeds, or taking on a monthly loan obligation.

– Guided Execution With HUD counseling, Realtor coordination, and pre-underwriting, we move fast—typically closing in 30 days or less.

Why This Matters—Now:

Protect your retirement Nest Egg from monthly payments* that could derail financial plans and future cash flow

Avoid a mortgage maze—keep more money in your pocket for fun and care needs

Live fully: right-sized homes, new hobbies, and secure years ahead

Ready to Help Your Clients Rewrite Their Story?

If your seniors are saying:

“I’d love to downsize, but where will I go? Can I afford the home I really want?”

“I don’t want to use all of my sale proceeds or tap savings just to move.”

“I want local, walkable, low-maintenance living.”

…then let’s talk. This tool could be life-changing—for them, and for your business.

(415) 259‑4979 | [email protected] | maryjolafaye.com

*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.

Equal Housing Lender

Silver Divorce: Three Ways to Divide Assets and Rebuild Retirement Security with the Use of Housing Wealth

By: John Metcalf

September 26, 2025

Mary Jo Lafaye

Reverse Mortgage Specialist | Helping Homeowners 55+ Unlock Retirement Income | Trusted Advisor to Financial & Legal Pros | Speaker & Educator

Financial Advisors, the FHA-insured Home Conversion Mortgage (HECM) for Purchase can help your clients gain financial footing.

As a financial advisor, you’ve likely seen firsthand how disruptive divorce can be—especially later in life. For older adults nearing or in retirement, a split can upend decades of financial planning, impact housing stability, and shrink the runway for recovery.

But here’s the good news: there’s an underutilized financial planning add-on tool that can help your senior clients reset and regain stability. The FHA’s Home Equity Conversion mortgage (HECM), a government-insured reverse mortgage, enables a Boomer or Senior to refinance a home to buy out a departing spouse’s interest (or buy a new home) all without the cash flow drag of monthly mortgage payments.

Trusted Advisors who understand the dynamics of the HECM Refinance, and the HECM for Purchase (sometimes referred to as the Lifestyle Loan) can turn a divorce into a strategic planning opportunity.

The HECM as a refinance tool is an FHA-insured loan that enables eligible adults aged 62+ (spouses who want to keep the marital home) to access the funds they need to buyout the departing spouse. This unique, non-recourse home financing tool provides the divorcee with non-taxable* loan proceeds — without taking on a new monthly mortgage payment, and without giving up assets held in securities or other resources they will need to rely on throughout their golden years.

What Is HECM for Purchase?

The Home Equity Conversion Mortgage (HECM) for Purchase enables the departing spouse to obtain home financing, secured by their new home, to buy a new primary residence. The new home is purchased using the HECM reverse mortgage proceeds and a down payment—typically from the sale of a previous home, or with proceeds from an equity buyout by their former spouse.

The major advantages (as with the HECM Refinance Loan) are: minimal income and credit requirements, and no monthly mortgage payments, which can greatly improve post-divorce cash flow in retirement.

Yet despite these HECM reverse mortgage benefits, there is a severe lack of awareness—especially among the professionals that seniors turn to in times of crisis: attorneys, mediators, and yes—financial advisors.

Why Senior Divorce Requires a New Planning Mindset

The so-called “Silver Divorce” trend is on the rise. AARP reports that divorce among Boomers has tripled since 1990, and Bowling Green State University found that one in eight U.S. divorce now involves someone age 65 or older. One in four includes someone in their fifties.

Dividing assets like real estate becomes more complicated in retirement, when both spouses are on fixed incomes and cash flow is critical. Many older divorcees also face:

– Reduced retirement savings

– Limited borrowing capacity

– Emotional stress over losing the family home

– Fewer years to recover financially

This is where HECM for Purchase shines—as a strategic tool for helping each spouse secure affordable housing and financial stability without draining retirement funds.

Case in Point: A Better Path After Divorce

Imagine a couple in their late 60s divorcing after decades of marriage. The marital home is sold, but only one spouse qualifies for a conventional mortgage—and neither wants to rent.

With HECM for Purchase each spouse can use their share of home sale proceeds as a down payment, and the HECM for Purchase pays the balance of the purchase price.

– Purchase a lower maintenance, right-sized home more suited to single living

– Eliminate monthly mortgage payments**

– Preserve cash flow for healthcare, travel, or simply peace of mind

In many cases, HECM for Purchase can safeguard against post-divorce housing instability—a growing concern among older women who initiate a majority of later-life divorces.

What This Means for Financial Advisors

If you serve pre-retirees or retirees, you’re already working with clients who may be affected by late-life divorce. Proactively introducing the HECM for Purchase Lifestyle Loan as part of your housing or retirement income strategy can:

– Help clients preserve liquidity and reduce fixed expenses

– Position you as a trusted, solution-oriented advisor

– Open doors for collaboration with divorce attorneys and real estate pros

– Differentiate your practice with a niche service offering

Build Your Referral Network

Attorneys and mediators are often the first to hear about divorce. But they’re not housing experts—and many still view reverse mortgages through an outdated lens.

As a financial advisor, you have an opportunity to:

– Bridge the knowledge gap

– Collaborate with reverse mortgage specialists

– Provide holistic support to divorcing clients

– Grow your practice through a valuable referral network

Final Thoughts

The intersection of Silver Divorce and financial planning is an emerging frontier—and the FHA-insured HECM for Purchase is one of the most powerful, underused tools available to financial advisors today.

Divorce is hard enough. Helping your clients maintain homeownership and retirement security is not just smart planning—it’s compassionate, comprehensive care.

Want to learn how HECM for purchase can support your clients as they navigate one of life’s biggest challenges—as well as providing new referral opportunities?

Let’s connect for a free consultation. Email me at [email protected] or send me a LinkedIn note.

*Consult a tax advisor for personalized tax guidance.

**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.

Equal Housing Lender