Learning More About Eligible Non-Borrowing Spouse Qualifications for a Reverse Mortgage

You may have read that in order to qualify for a reverse mortgage, you need to be 62 years old.  However, there are provisions for those married to a spouse younger than 62 years old.  I’d like to dive into this a little deeper in today’s blog post.  

The Department of Housing and Urban Development (HUD) has certain protections for eligible surviving non-borrowing spouses - specifically the ability to defer the status of due and payable on a reverse mortgage when the borrowing spouse passes away.  That can seem like a mouthful, so I’d like to use an example that might make things easier to follow.

Let’s say that a married couple named Jim and Linda have decided to take out a reverse mortgage on their home.  Jim is 65 years old and Linda is 60 years old.  Jim meets every qualification for the reverse mortgage, but because Linda is not yet 62 years of age, she’d be considered a non-borrowing spouse. 

A reverse mortgage becomes due and payable when the borrower passes away.  Since Linda was listed as a non-borrowing spouse, she will qualify for deferral of the loan becoming due and payable when Jim passes away - and most importantly be able to stay in the house - if she continues to meet the HUD qualifications for an eligible non-borrowing spouse.  They are:

1. The non-borrowing spouse was married to the borrowing spouse at the time the loan was closed and they remained married for the duration of the borrowing spouse’s life
2. The non-borrowing spouse was disclosed as such in the Home Equity Conversion Mortgage (HECM) documents
3. Have occupied, and continue to occupy, the property securing the HECM as the principal residence of the non-borrowing spouse

So if Linda remained married to Jim until his death (since they were married before the HECM closing), was disclosed as a non-borrowing spouse on the HECM documents, and lived in the home as her primary residence, she would qualify for deferral of the HECM. 

This can be a very important aspect to understand if you or your spouse is under the age of 62, and you are considering a reverse mortgage.  It would obviously be a nightmare scenario for someone to go through the loss of a spouse and then have to worry about being kicked out of their home.  Luckily, HUD has drafted protections for widows or widowers to allow them to stay in their home as long as they meet the criteria for an eligible non-borrowing spouse.

If you have any additional questions about a reverse mortgage, whether it’s related to a non-borrowing spouse or something else, I’d recommend reaching out to an expert.  The team at Equity Access Group specializes in reverse mortgages, and they can help you get the clarity you need to determine if a reverse mortgage is right for you.