REVERSE MORTGAGE FUNDING CARRIES SAME-AS AND UNIQUE TAX BENEFITS
Interesting. The two of you just have beaten this week’s filing deadline to get 2026 property tax credits for senior homeowners. With your combined annual income just under $69,000, you were able to qualify for the $150 credit despite the fact that your property has continued to appreciate nicely.
The recently passed Senate Enrolled Act 1 offers property tax relief to homeowners. As part of the benefits available as part of that legislation, Hoosiers over 65 are offered a tax credit of $150 (the income limit for qualifying for the credit has been increased to $60,000 for Individuals and $70,000 for couples)
Having made a firm decision to remain in your home for life, you have been exploring the benefits of reverse mortgage funding, with the initial purpose to use part of the equity to do some restructuring of the bathrooms, kitchen, and laundry room. You’ve been attending seminars about reverse mortgages but put the “project” on hold while you focused on the property tax credit topic. Now ready to get “back on track” with interviewing contractors (and raising funds to pay them), you want to better understand whether you’d be losing tax benefits by taking out a reverse mortgage (as opposed to a second mortgage).
You might say that the tax ramifications for reverse mortgage homeowners are both “same-as others” and unique.
Same-as tax benefits:
As reverse mortgage homeowners, you will be obligated to continue paying your property taxes (continuing to be responsible for homeowners’ insurance and maintenance casts). Whatever tax credits are available to Indiana homeowners will continue to be available to you.
Unique tax benefits:
The loan proceeds (set up as a line of credit from which you can draw) will be non-taxable. There will be no obligatory monthly mortgage payments.* In fact the unused portion of your equity will grow at the same rate as the rate of interest being charged on borrowed funds.
Senate Enrolled Act I, (especially since you’ve applied in time to get the benefit this year) will turn out to be good news for you, not only in 2026, but after you’ve accessed the equity built up in your home through reverse mortgage funding.
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
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