Reverse Mortgage Age Requirement: What You Need to Know

How Home Equity Conversion Mortgages (HECMs) Work

A Home Equity Conversion Mortgage (HECM) is a type of reverse mortgage that allows homeowners aged 62 or older who have significant equity in their home to borrow against its value. 

Unlike regular mortgages, you don’t need to make monthly mortgage payments. Instead, the loan is repaid only when the homeowner passes away, moves out, or sells the property. This makes HECMs a useful option for people who need extra cash during retirement, especially those who want to avoid foreclosure or the burden of monthly payments.

HECMs are the most common type of reverse mortgage in the U.S. and are backed by the Federal Housing Administration (FHA). To qualify for a HECM, you must work with a lender that the FHA approves. 

Additionally, the home must be the borrower’s primary residence, and you must have sufficient equity in your property, which may include a condominium.

Every year, the FHA tracks how many people get HECMs and reports the data through its parent agency, the U.S. Department of Housing and Urban Development (HUD). When a loan is “endorsed,” it means it’s officially added to the FHA’s mortgage insurance program, which protects lenders if the borrower defaults on the loan. 

Before taking out a HECM, borrowers are also required to attend a counseling session with an approved counseling agency, where they learn about the implications of the loan, including how it may affect their homeowners’ insurance and existing mortgage.

In fiscal year 2023, which ended on September 30, 2023, the FHA gave a mortgage insurance endorsement to 32,963 HECMs. This number is down by 50% compared to the peak in 2021.

The Age Requirement for Reverse Mortgage 

To qualify for a reverse mortgage, borrowers must be at least 62 years old. This is the minimum age for government-backed HECMs and most private reverse mortgages, but a few lenders offer reverse mortgages to borrowers as young as 55. 

Eligibility requirements for the HECM program also include having significant home equity and ensuring that the home remains the borrower’s primary residence. 

The HECM reverse mortgage does not require monthly mortgage payments and is repaid when the borrower moves out or passes away. 

However, the average borrower age for HECMs in FY 2023 was 74.84 years, reflecting that most participants are older homeowners looking to supplement their retirement income.

Reverse Mortgages in the U.S

Reverse mortgages, mainly the Home Equity Conversion Mortgages (HECMs) backed by the Federal Housing Administration (FHA), are the most common type of reverse mortgage in the United States. In 2023, 32,991 homeowners entered into reverse mortgages.

However, other methods to access home equity, such as home equity loans, home equity lines of credit (HELOCs), and cash-out refinancing, are more widely used. In 2022, over 59,000 reverse mortgages were originated.

Looking at more recent numbers, from October 2024 to September 2025, 7,426 Home Equity Conversion Mortgages (HECMs) have been endorsed. Since the program began in 1990, around 1.34 million HECMs have been issued.

The popularity of reverse mortgages has decreased over the years. Back in 2009, more than 119,000 borrowers took out reverse mortgages. In the first half of 2024 alone, 19,894 older homeowners opted for a HECM.

Who Uses Reverse Mortgage Loans

Reverse mortgages, especially those backed by the Federal Housing Administration (FHA), are commonly used by older homeowners who need access to their home equity. In fiscal year 2023, these mortgages were more popular among women than men. About 39% of reverse mortgages were taken out by single female borrowers, while single male borrowers took out 20.8%. 

In terms of racial demographics, 66% of Home Equity Conversion Mortgages (HECMs) went to White borrowers, 6.58% went to Black borrowers, and 4.84% went to Hispanic borrowers. This is notable because Black borrowers make up about 19% of all FHA-backed mortgages, and Hispanic borrowers make up roughly 25%.

Line of Credit Dominates for HECM Borrowers

Among those who choose Home Equity Conversion Mortgages (HECMs), the line of credit is the most popular payment option. In FY 2023, approximately 93% of HECM borrowers selected this option.

 It allows for more flexibility as homeowners can borrow as needed, and it often provides better long-term access to funds compared to lump-sum payments, monthly fixed payments, or equal monthly payments throughout the loan term.

These five states alone made up nearly 52% of all HECM loans in FY 2023, with California leading by a significant margin at nearly 27%.

​​Insurance Fund Trends and Borrower Withdrawal Patterns

Insurance Fund Trends

In FY 2023, claims on the FHA’s Mutual Mortgage Insurance Fund for Home Equity Conversion Mortgages (HECMs) totaled $5.7 billion, down from $6.23 billion in FY 2020. 

Most of these claims were from situations where the mortgage balance reached 98% of the maximum amount set by the FHA or when the borrower no longer lived in the home, as required.

Despite these claims, the insurance program for reverse mortgages has improved. As of October 2023, the fund’s capital ratio was 10.20%, a positive change from a negative 0.79% in 2020. This means the program is now financially stronger.

Borrower Withdrawal Trends

In FY 2023, borrowers who took out a reverse mortgage withdrew an average of 60.74% of the money they were eligible for in their first draw. This is lower than the 73.26% withdrawn in FY 2021. 

This change suggests that borrowers are being more careful with how much they withdraw upfront, as taking out large amounts early can cause home equity to run out faster due to interest and compounding balances.

Bottom Line

Reverse mortgages, especially HECMs, remain a popular choice for seniors, with 32,991 homeowners entering into these loans in FY 2023. California accounted for nearly 27% of all HECMs, while 93% of borrowers selected the line-of-credit payment option. The average borrower age was 74.84 years, with 66% of HECMs going to White borrowers. As factors like property tax, interest rates, and home value impact eligibility, understanding these key statistics helps homeowners navigate their options effectively.

It’s important to consult with a financial advisor before deciding on a reverse mortgage. For those considering alternatives, proprietary reverse mortgages may be an option, offering different terms and conditions than government-backed HECMs. 

Additionally, borrowers should be aware of potential closing costs, which can vary based on the type of loan and the lender, and ensure they meet all eligibility requirements for the best possible financial outcome. 

Fair Use Statement

You’re welcome to share this insightful article for noncommercial purposes, but please link back to this page at RetirementLiving.com.

Sources

1. Bankrate. “What Are the Requirements for Reverse Mortgages?” Bankrate. Published Jan. 1, 2024. Evaluated Mar. 17, 2025.
   Link Here
2. HousingWire. “Reverse Mortgage Case Numbers Reach Highest Level in Two Years.” HousingWire. Published Oct. 15, 2024. Evaluated Mar. 17, 2025.
   Link Here
3. National Council on Aging. “Get the Facts on Reverse Mortgages.” NCOA. Published Jan. 1, 2024. Evaluated Mar. 17, 2025.
   Link Here
4. Investopedia. “Understanding Home Equity Agreements: A Comprehensive Guide.” Investopedia. Published Jan. 12, 2024. Evaluated Mar. 18, 2025.
   Link Here
5. The Sun. “Americans Tapping Home Equity for Cash.” The Sun. Published Jun. 5, 2023. Evaluated Mar. 18, 2025.
   Link Here
6. Investopedia. “Reverse Mortgages in America: Statistics and Trends.” Investopedia. Published Dec. 2, 2023. Evaluated Mar. 17, 2025.
   Link Here
7. National Reverse Mortgage Lenders Association. “Annual HECM Endorsement Chart.” NRMLA. Published Jan. 1, 2024. Evaluated Mar. 17, 2025.
   Link Here