Quick Answer
If both of you are eligible, yes — being co-borrowers is meaningfully better than one of you being a non-borrowing spouse, because a surviving co-borrower keeps full access to the credit line and continues receiving tenure payments, while a surviving non-borrowing spouse keeps only the house.
- If both spouses are age-eligible, both should be co-borrowers.
- A surviving co-borrower keeps full credit line access and tenure payments.
- A surviving non-borrowing spouse keeps the house but loses access to funds.
- The principal limit is calculated on the younger spouse's age either way.
- Some originators historically removed younger spouses to inflate the principal limit.
- That practice caused real harm before 2015 and remains a warning sign today.
Key Facts
| Topic | Key Fact |
|---|---|
| Co-borrower survivor | Full credit line access; tenure payments continue |
| Non-borrowing spouse survivor | May remain in home; no access to funds |
| Principal limit basis | Younger spouse's age in both structures |
| When NBS is necessary | When the younger spouse is under the age minimum |
| Historical abuse | Removing younger spouses to inflate the principal limit |
| Reform | HUD ML 2014-07 and ML 2015-15 established NBS protections |
| Warning sign | An originator suggesting a spouse be left off the loan |
| Decision timing | At origination only — cannot be changed afterward |
Detailed Explanation
If both spouses meet the age requirement, both should be on the note. The reason is simple: what happens to the survivor. A co-borrower whose spouse dies experiences no change — the credit line remains fully available, tenure payments continue, and the loan proceeds exactly as before. A non-borrowing spouse in the same situation may remain in the home but cannot access a dollar of remaining credit and receives no further payments.
There is a common misconception that leaving the younger spouse off produces a higher principal limit. Under current rules it does not. The principal limit is calculated using the age of the youngest borrower or eligible non-borrowing spouse either way. The younger spouse's age is factored in regardless of which structure you choose, which means there is no proceeds advantage to leaving them off — only a substantial disadvantage to the survivor.
This was not always true, and the history matters. Before the 2014 and 2015 reforms, removing a younger spouse from the loan did increase the principal limit, and some originators encouraged exactly that without adequately explaining the consequence. Surviving spouses — often widows in their sixties — then received due-and-payable notices and were forced to sell homes they had lived in for decades. HUD's Mortgagee Letters 2014-07 and 2015-15 closed that gap by both establishing the deferral protections and requiring the younger spouse's age to be used in the calculation.
The non-borrowing spouse structure exists for a legitimate reason: when the younger spouse is under 62 and therefore cannot be a borrower on a HECM at all. In that situation, designating them an eligible non-borrowing spouse is the protection available and it should absolutely be done. What should raise concern is an originator suggesting that an age-eligible spouse be left off the loan. There is no borrower-side benefit to that structure, and if it is proposed, ask directly why.
Jay Zayer, CRMP — 18 Years Experience
If both spouses are 62 or older, I put both on the note. Every time. There is no proceeds advantage to doing otherwise and there is an enormous disadvantage to the one who lives longer. When a couple asks me whether they should leave one of them off, I ask who suggested that, because the answer is usually someone who has not explained what it costs. The only time I use the non-borrowing spouse structure is when the younger spouse is under 62 and there is no alternative.
Who This Is Right For
This may be a good fit if:
- Married couples deciding how to structure a reverse mortgage at origination
- Couples where an originator has proposed leaving one spouse off the loan
This may NOT be the right fit if:
- Couples where the younger spouse is under 62 — the eligible non-borrowing spouse designation is the correct and only available protection
Common Misconception
Myth: Leaving the younger spouse off the reverse mortgage produces a higher principal limit.
Fact: Under current HUD rules the principal limit is calculated using the youngest borrower or eligible non-borrowing spouse either way. There is no proceeds advantage to leaving an age-eligible spouse off, and a substantial disadvantage to the survivor.
Source: HUD Mortgagee Letter 2014-07; ML 2015-15
Authoritative Sources
- HUD Mortgagee Letter 2014-07 — hud.gov
- HUD Mortgagee Letter 2015-15 — hud.gov
- CFPB: Reverse mortgages and non-borrowing spouses — consumerfinance.gov
People Also Ask
Does leaving my spouse off the loan increase the principal limit?
No. Under current HUD rules the principal limit is calculated using the youngest borrower or eligible non-borrowing spouse regardless of the structure. There is no proceeds advantage.
When is the non-borrowing spouse structure appropriate?
When the younger spouse is under 62 and therefore cannot be a HECM borrower. In that situation, the eligible non-borrowing spouse designation is the protection available and should be made.
What should I ask at closing?
Ask explicitly, with both spouses present, which of you is signing the promissory note. Get the answer in writing and keep it with your estate documents.