Start with why the requirements exist

A HECM (Home Equity Conversion Mortgage) is the FHA-insured reverse mortgage. It is a consumer protection product. Every requirement in this article exists to make sure the loan is a good fit for the borrower and the borrower can keep the loan in good standing for decades.

Nothing in this list is a trick. Read it, discuss it with your family, and bring questions to your HUD-approved counselor.

1. Age: at least 62

At least one borrower on the loan must be 62 years of age or older on the day of closing. If you are married and one spouse is younger, there are protections that allow the younger spouse to remain in the home as an eligible non-borrowing spouse. These protections are not automatic and require specific documentation at closing — we will walk you through them.

Why it exists: the HECM program is designed around actuarial assumptions for borrowers 62 and above. Earlier ages are outside those assumptions.

2. Occupancy: primary residence only

The home must be your primary residence — the place you actually live most of the year. Vacation homes, second homes, and investment properties do not qualify for a HECM.

Specifically, HUD generally requires the borrower to occupy the home for the majority of the calendar year. Extended absences (a medical stay of more than 12 consecutive months) can trigger the loan becoming due.

Why it exists: the HECM is intended to let seniors age in place in the home they live in. It is not an investment vehicle.

3. HUD-approved counseling: required

Before you can apply, you must complete a counseling session with a HUD-approved agency. These counselors are independent — they do not work for the lender, and they are paid whether or not you take out the loan.

The session runs 60 to 90 minutes, typically by phone. The counselor walks through how a reverse mortgage works, confirms you understand the obligations, and discusses alternatives. You receive a certificate when you finish.

Why it exists: this is a consumer-protection gate Congress built into the program after early-era abuses. It is one of the strongest reasons the HECM program is well-regarded today.

4. Financial assessment: income and credit review

The lender performs a financial assessment. This is not the same as qualifying for a conventional mortgage — you are not being judged on debt-to-income ratios in the traditional sense. The assessment exists to confirm two things:

• You have the residual income and resources to pay property taxes, homeowners insurance, and home upkeep for the expected life of the loan.
• You do not have a pattern of significant credit delinquencies (unpaid federal debt, unresolved judgments, recent foreclosure history).

If the assessment raises concerns but the rest of the file is sound, the lender may be able to set up a Life Expectancy Set-Aside (LESA). A LESA carves out part of the loan proceeds specifically to pay future property taxes and insurance. That is a protective measure, not a punishment.

5. Property eligibility

The HECM program accepts the property types most families actually live in:

• Single-family homes (the most common scenario)
• 2-to-4 unit properties where you occupy one of the units as your primary residence
• HUD-approved condominiums (the condo project must be on or be approved onto the FHA list)
• Planned unit developments (PUDs) meeting FHA guidelines
• Manufactured homes meeting specific FHA construction and foundation standards

Co-ops are generally not eligible. Mixed-use properties with heavy commercial square footage are generally not eligible. We can confirm eligibility before you invest time in a full application.

6. No delinquent federal debt

Outstanding federal tax liens, defaulted student loans, or other delinquent federal obligations will typically need to be resolved before a HECM can close. This is a standard FHA requirement. Often these are resolvable — the path just needs to be clear before closing.

7. Mortgage and liens on the property

You do not need to own the home free and clear. Many HECM borrowers still have a traditional mortgage when they apply. At closing, the HECM pays off any existing mortgage and liens on the property. You end up with one loan — the HECM — and no required monthly mortgage payment going forward (property taxes, insurance, and upkeep still required).

The existing mortgage balance simply becomes part of the math on the front end. If the HECM proceeds are not enough to cover the existing balance, the borrower can bring funds to closing to make up the gap, or the loan will not proceed.

What the requirements do not include

Common misconceptions worth clearing up.

• A specific credit score cutoff. The financial assessment looks at patterns, not a single FICO number.
• A specific income amount. The assessment is about whether you can sustain taxes, insurance, and upkeep — not an income threshold.
• Forced relocation. You do not have to leave the home. You stay as long as it remains your primary residence and you keep the loan in good standing.
• Giving up ownership. You remain the owner on title. The lender has a lien on the property, just like any mortgage.

A fair self-test

Ask yourself these five honest questions:

1. Are you at least 62, and is this home where you actually live most of the year?
2. Can you comfortably cover property taxes, homeowners insurance, and upkeep going forward?
3. Do you plan to stay in this home for at least the next 5 to 10 years?
4. Have you invited a trusted family member or advisor into this decision?
5. Are you willing to complete HUD counseling with an open mind — including the possibility it confirms this is not the right tool for you?

If you answered yes to all five, you are a good candidate for the next step: a preliminary conversation.

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