The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program.
There are a number of requirements for eligibility:
• All owners must be at least age 62.
• The amount that can be borrowed against the value of the home is generally much lower for a reverse mortgage than for a traditional mortgage, so existing mortgages should be small. They must be paid off by the new reverse mortgage.
• Borrowers must live in the home as a primary residence, or must make it their primary residence within 60 days. (This means you can use a reverse mortgage to buy a new home, not just refinance the one you're living in now.)
• Single-family homes are eligible for reverse mortgages, as are 2-to-4 unit properties if one of the units is owner-occupied. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.
• Borrowers must meet with a HECM counselor and review alternatives to a reverse mortgage, and discuss the financial impact of the mortgage on the borrowers, the estate left to heirs, and qualification for other government programs such as Medicaid and SSI.
• Homeowners' insurance must be maintained, property taxes paid in a timely manner and the property must be kept in good repair.
Qualifying for a reverse mortgage is one thing; whether it's a good idea for you to get one is another question, best discussed in detail with your financial planner.