What Are the Requirements for a Reverse Mortgage?

After 15 years of qualifying files in California and Arizona, I can tell you most denials are not about age - they are about documentation gaps that could have been fixed before underwriting.

Here is a clear breakdown of the requirements for both the FHA HECM and proprietary reverse mortgage programs available in California.

Age Requirement

For the FHA HECM (Home Equity Conversion Mortgage), the minimum age is 62. All borrowers on the title must be at least 62.

For proprietary reverse mortgages in California, the minimum age is 55. This is a significant advantage for early retirees who want to access equity before reaching federal program eligibility.

Important: if you have a spouse or partner who is not yet 55 (or 62 for HECM), they can still be listed as a non-borrowing spouse on the loan with specific protections - but their age will affect the amount available to you.

Primary Residence Requirement

The home must be your primary residence - meaning you live in it as your main home for the majority of the year. You cannot use a reverse mortgage on a vacation home, investment property, or second home.

You must continue to occupy the home as your primary residence for the life of the loan. If you move out permanently - including to a care facility for more than 12 consecutive months - the loan becomes due.

Home Equity Requirement

You do not need to own your home free and clear to qualify. However, you must have sufficient equity to pay off any existing mortgage balance with the reverse mortgage proceeds and still have funds available to you.

As a general guideline, most homeowners need at least 50% equity in their home to benefit meaningfully from a reverse mortgage, though this varies based on age and current interest rates. The older you are, the more you can typically access.

Property Type Requirements

Eligible property types for a HECM include:

� Single-family homes

� HUD-approved condominiums

� Two-to-four unit properties where you occupy one unit

� Manufactured homes that meet FHA requirements

Important note for California condo owners: many California condo developments are not HUD-approved, which means HECM eligibility may not apply. Proprietary reverse mortgage programs often have more flexible property guidelines and may be a better fit for condo owners.

Financial Assessment Requirements

Unlike a traditional mortgage, a reverse mortgage does not require a minimum credit score or income level to qualify. However, lenders do conduct a financial assessment to evaluate:

� Your ability and willingness to pay property taxes and homeowner's insurance

� Credit history and any outstanding federal debts

� Overall financial situation

If the assessment raises concerns about your ability to keep up with ongoing property obligations, the lender may require a Life Expectancy Set-Aside (LESA) - a portion of your loan proceeds held in reserve to cover future tax and insurance payments automatically.

A client I worked with in San Marcos came in convinced his credit profile ended the conversation before it started. Once we reviewed his real obligations and reserve pattern, the file moved forward with a LESA structure instead of a denial. His turnaround time from consultation to application was 11 days because we fixed missing documents first. What I find in practice is that preparedness matters more than most borrowers expect.

Counseling Requirement

Before applying for a HECM, you must complete a session with a HUD-approved reverse mortgage counselor. This is an independent, third-party counselor - not affiliated with your lender - who reviews your options, explains the loan terms, and answers your questions.

Counseling typically costs $125-$200 and can be done by phone. You receive a counseling certificate upon completion, which is required to proceed with your application.

According to HUD HECM program rules, independent counseling is a mandatory step before a HECM application can close.

What Does NOT Disqualify You?

Several common misconceptions exist about what prevents qualification:

� Having an existing mortgage does not disqualify you - it is paid off at closing with loan proceeds

� Having a low credit score does not automatically disqualify you

� Fixed income or no income does not automatically disqualify you

� Owing back property taxes may be workable through a LESA arrangement

Frequently Asked Questions

What is the minimum age for a reverse mortgage in California?

Age 55 for proprietary programs, age 62 for the FHA HECM program.

Can I qualify if I have bad credit?

Possibly. Reverse mortgages do not have a minimum credit score requirement. The financial assessment looks at your overall picture, not just a credit score number.

Does my income affect whether I qualify?

Income is not a qualifying factor in the traditional sense. However, the financial assessment will look at your ability to maintain property taxes and insurance going forward.

This material is not from HUD or FHA and has not been approved by HUD or any government agency. All reverse mortgage loans are subject to credit and property approval. Terms and conditions may apply. This content is for educational purposes only and is not financial, tax, or legal advice.