Eligibility
Reverse mortgage requirements, and whether you actually qualify.
Seven things FHA looks at. None of them is a credit score. Here's each one in plain language, plus the situations that trip people up.
Reverse mortgage qualification works backward from a traditional loan. A regular mortgage asks whether you can make a payment. A HECM has no required payment, so FHA instead asks whether you can hold on to the home: are you old enough, do you live there, do you have equity, and can you keep paying taxes and insurance for the rest of your life?
The seven requirements
Age 62 or older
FHA HECMs require the youngest borrower to be at least 62. A handful of proprietary reverse mortgages start at 55, though they're not FHA-insured and price differently. If one spouse is younger, they can be an eligible non-borrowing spouse.
The home is your primary residence
You must live there more than half the year. A Minnesota lake cabin, a seasonal property or a rental doesn't qualify. Moving out for more than 12 consecutive months, including into assisted living, makes the loan due.
Meaningful equity
Usually 50% or more. Any existing mortgage is paid off at closing from the proceeds, so the HECM has to be large enough to clear it. Owners who bought before 2005 in the Twin Cities almost always clear this comfortably.
Completed HUD counseling
An independent, HUD-approved counselor walks you through costs, alternatives and obligations. You get a certificate, and no application can move forward without it. This is a protection, not a formality.
FHA financial assessment
Not a credit-score test. Underwriting reviews your property charge payment history and residual income to confirm you can keep paying taxes and insurance. If it's tight, a Life Expectancy Set-Aside may be required.
No delinquent federal debt
Unresolved federal tax liens or defaulted federal student loans must be cleared or in an approved repayment plan before closing.
Property meets FHA standards
Roof condition, handrails, functioning mechanicals, and peeling paint on pre-1978 homes are the usual items in Minnesota. Required repairs can often be funded from loan proceeds at closing.
Eligible and ineligible properties
| Single-family home | Eligible |
|---|---|
| 2–4 units, owner-occupied | Eligible |
| FHA-approved condominium | Eligible |
| Townhome / attached villa | Eligible |
| Manufactured home meeting FHA standards | Eligible |
| Non-FHA-approved condo | Not eligible for a HECM |
| Cabin or seasonal property | Not eligible |
| Second home or rental | Not eligible |
| Co-op | Not eligible |
The non-borrowing spouse question
This is the most consequential detail in the entire program and the one most often handled badly. If one spouse is under 62, they can be named an eligible non-borrowing spouse. Federal rules then allow them to remain in the home after the borrowing spouse dies, provided they were married at closing, are properly identified in the loan documents, and keep meeting the occupancy, tax and insurance obligations.
The trade-off: the amount you can access is calculated using the younger spouse's age, so proceeds are lower. That's a fair price for the protection. Anyone who suggests leaving a younger spouse off the paperwork entirely to boost proceeds is putting them at risk of losing the home.
What happens if the financial assessment is tight
FHA can require a Life Expectancy Set-Aside, a portion of your principal limit reserved to pay property taxes and homeowners insurance for the projected life of the loan. It reduces the cash you receive up front, sometimes substantially, but it removes the single largest cause of reverse mortgage default. Brian will tell you before you apply if a set-aside is likely, so it isn't a surprise at underwriting.
Minnesota adds one more step
Beyond FHA's requirements, Minnesota law requires a seven-calendar-day cooling-off period between your written loan commitment and closing, and prohibits bundling a reverse mortgage with annuity or investment sales. Details are in the Minnesota reverse mortgage guide. For the basics of how the loan itself works, start with what is a reverse mortgage, and for the money side see reverse mortgage costs.
FAQ
Eligibility questions
What homeowners ask before they're ready to apply.
Let's explore your options
A conversation with Brian is educational, unhurried, and never salesy.
Whether you're planning retirement, buying your next home in Bloomington, or helping aging parents, start with a conversation, not a pitch.
"Brian didn't try to sell us anything. He drew a diagram on a napkin and answered every question we had. Two months later we called back."