FHA-Insured Reverse Mortgage Qualifications
Traditional mortgages are based on the homeowner’s ability to make monthly payments, and for this reason, things like credit, employment, income, and other assets are considered in the qualification process. Reverse mortgage qualifications do not include any form of monthly loan payment and therefore none of those factors is considered.
There are six specific FHA requirements to qualify for a reverse mortgage:
1. At the time of closing all borrowers must be 62 years of age or older, and must occupy the property as their primary residence. Parties on title that do not meet the age requirement (including a spouse), or that do not occupy the property, must be removed from title at the time of closing.
2. The property being mortgage, whether as a refinance or purchase, must be the borrower’s primary residence. Vacation homes and rental properties are not eligible. The purchase or refinance of a 2-4 unit property is acceptable as long as the borrower occupies one of the units as their primary residence.
3. The home that secures the reverse mortgage must meet standard FHA appraisal guidelines for property type, value, and condition. Single-family homes, condominiums, town homes, 2-4 unit properties, and modular homes are all eligible. Condominiums must meet additional FHA requirements to be eligible for a reverse mortgage.