5331.5 Reverse Mortgage

A reverse mortgage is a specific, federally insured form of a home equity loan. A reverse mortgage converts home equity into cash, while the individual continues to use the home. The payments may come in the form of predictable, regular payments, much like income. A reverse mortgage differs from a standard home equity line in that it is only available to individuals age 62 and over.

Like any home equity loan, the reverse mortgage reduces the home’s equity value. The payments from the reverse mortgage are exempt as income, but countable as a resource the month following the month of receipt.