Home Equity
Reverse Mortgage
Homeowners 62 and older, and in some proprietary programs homeowners 55 and older, can ask whether a reverse mortgage belongs in the plan for staying in the house.
- HECM
- Proprietary options
- Eligibility questions
Staying in the house
Equity, occupancy, and counseling
You keep title on a typical reverse mortgage, and the obligations do not go away. Taxes, insurance, and maintenance stay with you.
Age, occupancy, and equity all matter. None of them are decided by a button on this website.
Ask the Tokar Team to explain the counseling step before you apply. The team can start that conversation.
01
What the Loan Actually Does
A reverse mortgage converts part of the equity into funds you can use while you keep living in the home. The common version is the Home Equity Conversion Mortgage, or HECM, which is insured by the FHA. On a HECM you generally keep title, you do not make a required monthly principal-and-interest payment, and the loan is repaid when the home is sold or is no longer your primary residence. Proceeds are often not treated as taxable income; a tax advisor should confirm that for your return.
02
Counseling Comes Before an Application
HUD-approved counseling is required before you apply for a HECM, so an independent counselor explains the loan before a file is opened. After that, an application and an FHA appraisal confirm value and property condition. HUD reviews residual income and recent payment history. There is no published minimum credit score for that review. Any existing mortgage is paid off from the proceeds at closing, and funds are available after the right-of-rescission period in the form you chose.
03
Who HUD Looks At
At least one borrower must be 62 or older. A younger spouse can sometimes be an eligible non-borrowing spouse. The home must be your primary residence and meet FHA property standards, and there must be enough equity to pay off any current mortgage at closing. You still pay property taxes, homeowners insurance, and upkeep. Missing those can put the loan in default. FHA’s maximum claim amount is a published figure that changes; the 2026 amount is $1,249,125. Proprietary products can cover higher-value homes and, in some cases, borrowers as young as 55.
04
Protections, Payout Choices, and Tradeoffs
A HECM is a non-recourse loan, so you or your heirs are not expected to repay more than the home’s value when the loan becomes due. Heirs can sell, refinance to keep the home, or satisfy the loan at 95% of appraised value, and they are not personally liable. Funds can be a line of credit, monthly payments for a set term or for as long as you live in the home, a lump sum, or a mix. A HECM for Purchase can buy a different primary home. Costs include origination, capped at $6,000, plus FHA mortgage insurance and ordinary closing costs. The balance grows, so equity falls over time. Needs-based benefits such as Medicaid can be affected; Social Security and Medicare generally are not.
The house you live in
Home, company, and the equity conversation
Ask about counseling first
The Tokar Team will explain the counseling step before an application. This conversation does not pull credit and does not start an application.