A reverse mortgage is a special loan for homeowners 62 and older. It lets you convert part of your home equity into tax-free cash without having to sell your house.
With this loan:
You don’t have to make monthly mortgage payments if you don't want to.
You must still pay property taxes, homeowners insurance, HOA dues (if any), and keep the home in good condition.
You must live in the home as your primary residence.
You pay back the loan at a later date, usually when the house is sold or you no longer live there.
The most common type is the FHA-insured HECM (Home Equity Conversion Mortgage). This is the only reverse mortgage backed by the federal government. For homeowners with higher-value homes, there are also non-HECM options with loan amounts up to $4 million. In some states, these are available starting at age 55.
At Canopy Mortgage, we offer both FHA-insured HECM loans and non-HECM reverse mortgages, so you can choose what works best for you.
Over 1.36 million Americans have already used a reverse mortgage as part of their retirement plan—94% said it gave them more peace of mind.*
Click HERE for a quick reverse mortgage explainer video
*Source: 2025 NRMLA
To be eligible for a reverse mortgage, you must:
Be 62 and older (or, 55+ in select states for non-HECM products)
Live in the home as your main residence
Keep your home in good shape
Continue paying all your property charges—like taxes, insurance, HOA fees—just like you would with any other loan
The amount of money you can receive depends on a few factors:
The Age of the youngest borrower (generally, the older you are the more money you receive)
The appraised value of your property
Current interest rates
The way you receive your money from a reverse mortgage depends on the loan you pick. Your loan will decide if you get the money as the following:
One big payment upfront
Monthly payments
A line of credit you can use when needed
Or a mix of these choices
Nope. You can use the money from a reverse mortgage any way you'd like. Many people use it for everyday expenses, healthcare costs, home repairs, travel, helping family, or anything else that matters to them.
Many types of homes can qualify for a reverse mortgage, including:
Single-family homes
New construction
2-4 unit properties—you must live in one unit
Condos—for HECMs, condos must be FHA-approved. Other types of reverse mortgages, may allow financing for condos that aren't FHA-approved
Manufactured homes—only with HECMs and must meet FHA standards
Townhomes
Planned Unit Developments (PUD)
Once you have a reverse mortgage, your responsibilities are similar to any other home loan. You'll need to keep up with property taxes, homeowners insurance, and any other property fees, like HOA dues if they apply. You also need to maintain your home in good condition and live in it as your primary residence. As long as these are taken care of, you can enjoy your home and the money from your loan.
You stay the owner of your home and remain on the title, just like with a regular mortgage. You're always free to sell your home, refinance, and pay off the reverse mortgage. The bank does NOT own your home—it's still yours!
Yes, you can purchase a new home using a reverse mortgage. For older homeowners looking to right-size into a property better suited for retirement, the HECM (Home Equity Conversion Mortgage) for Purchase program offers a unique opportunity.
This program allows you to buy a new home with no mandatory monthly mortgage payments*. You simply make a sizeable down payment and then finance the rest with a HECM. This is an excellent option for those looking to downsize, upsize, or relocate closer to family. Unlike an all-cash purchase, this strategy enables you to keep more of your savings in the bank while acquiring your new home.
Why a HECM for Purchase? Examples:
You want to preserve your assets but still operate like you paid cash for the property.
You want to upgrade to a property that would be unattainable based on the equity in your current property, and you cannot go into debt at this stage of your life to support the new, nicer residence.
Your current home no longer meets your needs either because of its physical location or characteristics/limitations, but you cannot pay cash for a new home, and your budget will not support new house payments.
*You must continue to pay your property taxes, homeowners insurance, keep your home in good shape, and live in it as your primary residence.
A reverse mortgage generally gets repaid when all borrowers have passed away. But there are other instances—called “maturity events”—that will cause your loan to become due and payable which include:
Your home is no longer the primary residence of at least one borrower.
You sell the home.
The last borrower fails to occupy the home for 12 consecutive months due to mental or physical illness.
You fail to meet your loan obligations—like paying property taxes, homeowners insurance, or maintaining the home in good condition.
The title to the home is transferred, and all borrowers are removed from the title.
Yes, the home can absolutely be inherited. Like traditional loans, your heirs can keep the home by paying off the reverse mortgage by refinancing the loan into a new mortgage or by using other verifiable funds. And, if the reverse is a HECM loan, the amount due will be the lesser of the loan balance or 95% of the appraised market value of the home, which means they may be able to buy back the home at a discount.
Alternatively, your heirs can choose to sell the property. If the sale price is higher than the amount owed on the reverse mortgage, your heirs are entitled to keep all the remaining equity.
One of the best features of a reverse mortgage is that it's a non-recourse loan. This means, you nor your heirs/estate can never owe more than the home is worth at the time it is sold. The home itself covers the debt—not you or your family—you literally can't go upside down and no other assets are at risk!
Want to know a secret? If your heirs inherit the home, the amount they owe is the lesser of 95% of the appraised value or the loan balance. That means they're guaranteed at least 5% equity, even in the worst-case scenario.
Of course! You’re free to make payments anytime you’d like—there are no prepayment penalties.
In fact, if you have an adjustable-rate HECM, making payments can be a smart move. Each payment you make helps grow your line of credit, giving you more access to your home’s equity over time—no matter what happens to your loan balance or home value.
Implementing a line of credit strategy has become a popular financial move, and more and more financial advisors are recommending it to help seniors make the most of their home equity.
And here’s another plus: unlike a Home Equity Line of Credit (HELOC), your reverse mortgage line of credit can’t be frozen or closed as long as you keep the loan in good standing. It stays open for as long as you have your reverse mortgage—no matter what the market does.
The money you get from a reverse mortgage isn’t counted as income, so you don’t have to pay taxes on it. Many people like using a reverse mortgage so they don’t have to take money out of their 401(k) or other retirement accounts, which could be taxed.
*The information herein is not intended as legal, tax, or financial planning advice and should not be relied upon or construed as such. Consult a financial advisor for more details.
No. As long as you keep up with the loan requirements—like paying your taxes and insurance, taking care of the home, and continue living in it as your main residence—you can stay in your home for the rest of your life. And don't worry, you can't be forced to leave just because you live longer than expected.
Not at all! Today’s reverse mortgage is more than just a loan—it’s a flexible tool that can help anyone in retirement, even if you’re well-off. It can pay off your current mortgage, give you extra cash, let you delay Social Security so your benefits grow, and even set up a safety net you can tap when needed. It’s all about giving you choices and peace of mind for both the expected and unexpected moments in retirement.
Social Security retirement income and Medicare benefits don't change with a reverse mortgage. Need-based programs like Medicaid and Supplemental Security Income, could be affected because of income and savings limits. To be safe, talk with a benefits administrator and your loan officer.
Did you know?
Not one HECM reverse mortgage has ever been foreclosed due to a missed monthly payment because monthly principal and interest payments are OPTIONAL. During the 2008 financial crisis alone, 6 million+ conventional loans were foreclosed for missed monthly payments. - Pew Research Center
After the Los Angeles fires, millions of homeowners were displaced and still had to keep making mortgage payments or risk losing their homes to foreclosure. But reverse mortgage borrowers were different. Even if their home was destroyed, they didn’t have monthly principal and interest payments. And they still had access to their line of credit to pay for temporary housing and help rebuild faster.*