Frequently Asked Questions

A reverse mortgage allows homeowners aged 62 and older to convert home equity into tax-free cash, a monthly payment stream, or a line of credit without monthly mortgage payments.

In high-value North Bay markets like Mill Valley or Healdsburg, borrowers can utilize:

• Standard FHA HECMs: Subject to federal lending limits.
• Proprietary (Jumbo) Reverse Mortgages: Designed specifically for higher valued homes with loan amounts up to four million dollars.

Borrowers retain ownership of the home and must continue paying property taxes, homeowners insurance, and property maintenance just like with any mortgage.

No, obtaining a reverse mortgage does not trigger a property tax reassessment under Proposition 13 in California.

Because a reverse mortgage is a loan secured by your home equity—not a change in property ownership—your current Prop 13 tax base remains completely unchanged. You remain the full owner of your home and responsible for paying your regular property taxes and hazard insurance on time.

Yes, you can obtain a reverse mortgage if your home is located in a designated high fire hazard severity zone or insured through the California FAIR Plan.

To clear HUD’s mandatory hazard insurance guidelines before closing, lenders require proof of full coverage, which is typically structured using:

• A California FAIR Plan Policy: Covers primary fire and wildfire perils.
• A Supplemental Difference-in-Conditions (DIC) Policy: Fills in coverage gaps such as water damage, liability, and theft.

Reverse mortgage loan proceeds are classified as loan advances rather than earned income, meaning they do not impact entitlement programs like Medicare or Social Security.

However, means-tested benefits like Medi-Cal or SSI enforce strict liquid asset limits. How you handle your loan draws determines your eligibility:

• Spent in the Same Month: Funds drawn and spent within the same calendar month do not count as assets or affect your benefits.
• Accumulated Cash: Unspent loan proceeds retained in a bank account at the start of a new calendar month count toward your resource limit and could jeopardize qualification.

When the last remaining borrower permanently leaves the home or passes away, the reverse mortgage becomes due. If you’ve passed away, your heirs retain ownership of the home and have several options:

• Sell the Home: Pay off the loan balance from the sale proceeds and retain 100% of the remaining equity.
• Keep the Home: Refinance the loan balance into a traditional mortgage or pay off the balance using other estate assets.
• Non-Recourse Protection: Because all HECMs are non-recourse loans, neither you nor your heirs will ever owe more than the home’s current market value at the time of sale—even if the loan balance exceeds the home’s value.

Yes, using a HECM for Purchase (also called Reverse for Purchase, and Lifestyle Home Loan) allows seniors aged 62+ to purchase a new primary residence—such as downsizing to a single-story home or moving closer to family—with a down payment of approximately 50-60%. The balance is put on a reverse mortgage, and requires no monthly mortgage payments. (You’re still responsible for property tax, homeowner’s insurance, and upkeep, just as with any mortgage.)

There are two answers here, and the first one matters more than people realize.

Sooner than you think, if you’re already struggling. I recently heard from a woman who’d attended one of my educational webinars, twice, back in 2024. People around her said reverse mortgages were “bad,” so she decided to wait. For the next two years, she tried to make it work on her own: draining her retirement savings, taking out a HELOC, leaning on credit cards. By the time she called me again, she’d taken on so much debt that she no longer qualified for a reverse mortgage of any kind. Now she has to sell her home, and likely leave the community and the people she loves.

This isn’t rare. I hear some version of this story more often than I’d like. It’s one of the hardest parts of this job: watching someone lose an option they actually had, simply because they waited too long to find out how it really worked. Waiting doesn’t just delay the decision, it can quietly close the door on it.

The second answer is for a different situation: if you plan to stay in your home long-term, some financial planners now recommend setting up a HECM line of credit as early as age 62, even before you need the money. You don’t have to draw on it right away. Simply having it in place lets the unused portion grow over the years, so more is available later when you actually need it. To be clear, this isn’t interest you’re earning like a savings account, it’s more borrowing capacity becoming available on a line already approved for your loan. And unlike a lot of financial products, you can pay the balance all the way down to zero without losing the line. HUD guidelines specifically prohibit lenders from closing a HECM line of credit just because the balance reaches zero; it stays open and keeps growing unless a specific default event happens, like falling behind on property taxes or no longer living in the home.

Dr. Wade Pfau, a well-known retirement researcher, has published research showing that opening a HECM line of credit as early as possible, even if it sits untouched for decades, can result in significantly more available credit later than waiting to open one at an older age.

Sources: HUD HECM Program Guidelines · Wade Pfau, Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement · Financial Planning Association: “Understanding Line of Credit Growth in a Reverse Mortgage”

Some historically did, and a few still do. But that’s shifting, and it’s worth understanding why.

In January 2026, Rethinking65, a publication written for financial advisors, ran a piece titled “Do Reverse Mortgages Deserve a Second Look?” by Steve Parrish, a longtime financial planning professor and attorney. He’d removed reverse mortgages from his own recommendations for years, until he started studying research by Dr. Wade Pfau and changed his mind. His current view: a reverse mortgage isn’t a “yes” or “no” product, it’s one tool in the retirement planning toolkit, alongside things like Social Security timing, Roth conversions, and investment strategy.

Part of what’s driving that shift: homeowners 62 and older are sitting on more than $14 trillion in home equity nationally, most of it completely unused in retirement planning. Parrish also points to real consumer protections that came out of a 2019 HUD overhaul of the HECM program, addressing a lot of the legitimate criticism reverse mortgages earned in their rockier early years.

To be fair, Parrish is clear these loans aren’t right for everyone. He flags real reasons to say no: not enough equity to justify the upfront costs, difficulty keeping up with property taxes and maintenance, plans to move within a few years, or reliance on Medicaid, where proceeds can affect eligibility if not carefully structured. But he also lays out legitimate strategic uses: supplementing income, bridging the gap before claiming Social Security, acting as a buffer during market downturns instead of selling investments at a loss, paying off an existing mortgage, or providing liquidity in a late-life divorce.

The honest answer: more financial planners are taking a second look, but it still depends entirely on your situation, which is exactly why this isn’t a decision to make from a magazine article, mine or anyone else’s.

Sources: Rethinking65: “Do Reverse Mortgages Deserve a Second Look?” by Steve Parrish

“Silver splitters” is the term for couples over 50 who divorce, and it’s becoming a lot more common. Gray divorce rates in the U.S. roughly doubled between 1990 and 2010. It creates a specific financial problem: two people who built one household’s worth of retirement income and assets suddenly have to support two households, usually on fixed incomes, with a lot less runway to recover than a younger couple would have.

I recently worked with a couple in their 70s going through exactly this. Neither of them could qualify for a traditional mortgage on their own, their incomes were too fixed, too limited. The wife used a reverse mortgage to buy out her husband’s share of their home so she could stay where she wanted to be. Her husband then used a HECM for Purchase to buy a new home of his own. Without a reverse mortgage, neither of them would have had that option; they could easily have needed to sell the family home and figure out a far more complicated, and expensive, transition.

That’s one of two common patterns divorce lending professionals see. In the first, one spouse keeps the marital home and uses a reverse mortgage to pay the departing spouse an equity buyout, without taking on a new monthly payment. In the second, the home is sold, the proceeds are split, and each spouse uses their share plus a HECM for Purchase to buy their own place, again with no new monthly mortgage payment for either person.

Neither path is right for everyone. A reverse mortgage doesn’t make sense if you’re planning to move again soon, and if you’re relying on Medicaid, proceeds can affect eligibility if they’re not carefully structured. This is also a situation worth involving a Certified Divorce Lending Professional in, alongside your divorce attorney, since the mortgage and the settlement terms need to line up. But for a lot of couples divorcing in their 60s, 70s, and beyond, it’s a way to split a marriage without also splitting two people’s financial security.

Sources: HousingWire: “Reverse mortgages emerge as a tool in ‘gray divorce’ settlements” · Kiplinger: “Would a Reverse Mortgage Work for You in a Gray Divorce?”

It’s not the stock market or inflation. It’s a health crisis.

According to the U.S. Department of Health and Human Services, nearly 70% of people turning 65 today will need some form of long-term care in their lifetime. And it isn’t cheap: Private nursing homes in the San Francisco Bay Area often range from $11,000 to $14,000+ per month, and home health aides average $35–$45/hour. A single fall or sudden diagnosis can turn into tens of thousands of dollars in costs almost overnight: home modifications, paid caregivers, or a rushed move into assisted living.

Financial advisors often recommend comparing a reverse mortgage side by side with other options, like a HELOC or a securities-based line of credit, specifically for handling this kind of emergency. Sometimes a family needs a large sum on short notice, say $200,000 to secure a spot in a care facility, and a reverse mortgage line of credit can provide that bridge without forcing anyone to sell investments in a hurry or drain savings meant to last the rest of retirement.

Here’s the part that catches people off guard: waiting until the crisis actually happens is often too late. Both your health and your finances factor into reverse mortgage qualification, so if either changes too much during a prolonged illness, the option can disappear right when you need it most. Researchers have studied this directly. A widely cited paper in the Journal of Financial Planning was literally titled “HECM Reverse Mortgages: Now or Last Resort?,” and the research points toward setting up access to home equity before a crisis, not after.

Today’s reverse mortgages aren’t the “last resort” loans people picture. They’re increasingly used as one part of a broader plan, specifically because home equity, sitting there unused, is one of the biggest and most overlooked resources most retirees have.

Sources: RBC Wealth Management: “How to Pay for Long-Term Care in a Health Crisis” · Pfeiffer, S., Schaal, C.A., & Salter, J., “HECM Reverse Mortgages: Now or Last Resort?”, Journal of Financial Planning, May 2014 · U.S. Department of Health and Human Services, long-term care statistics

Legally, no. But practically, I think they really should, and I’ll usually offer to sit down with the whole family together to walk through it and answer whatever concerns or myths anyone brings to the table. It tends to go better for everyone.

Here’s a practical reason why: when the loan eventually comes due, whether because you move out permanently or pass away, someone needs to notify the loan servicer so the standard process, a repayment plan, a sale, or transferring the loan, can move forward on schedule. If your adult children don’t know the loan exists, they won’t know to make that call. That can mean missed deadlines and, in the worst cases, real risk to the home ending up in foreclosure simply because nobody was managing the paperwork on time.

I’ve also seen a more painful version of this play out: adult children who didn’t want their parent to get a reverse mortgage, worried it would reduce what they’d eventually inherit, offer instead to personally cover the monthly shortfall themselves. It’s a generous-sounding plan. But I’ve watched it fall apart more than once: the payments don’t actually happen, month after month, and the parent ends up calling me again later, having quietly gone even deeper into debt in the meantime.

That’s exactly why I’d rather have the honest conversation with the whole family upfront, not to pressure anyone into a decision, but so everyone understands the real tradeoffs and nobody is operating on assumptions that don’t hold up.

Sources: HUD Mortgagee Letter 2023-23 (servicer notification and occupancy requirements)

Yes, as long as you have enough equity. At closing, the reverse mortgage pays off your existing mortgage balance first, and any remaining funds go to you. Either way, your monthly mortgage payment goes away.

Not necessarily before closing. HUD requires the home to meet basic health and safety standards, but if something needs fixing, a repair set-aside can sometimes be built into the loan to cover it afterward, rather than requiring the work done first.

Sometimes. The condo has to be FHA-approved, or qualify through HUD’s Single-Unit Approval process. California has been tightening condo lending rules generally, so it’s worth confirming your specific building’s status with me directly rather than assuming either way.

Generally, no, at least not here. Nationally, manufactured homes can sometimes qualify for a HECM if they’re on a permanent foundation and classified as real estate. But in Sonoma County specifically, the vast majority of manufactured home communities sit on leased land, which typically rules out a reverse mortgage. Worth knowing upfront if you’re in one of these communities, so you’re not disappointed after getting your hopes up.

In my experience, most of my reverse mortgages close in 30 days or less. That can stretch out if the appraisal takes a while in your area or the home needs repairs, but 30 days is the realistic expectation, not the best-case one.

Yes, anytime. The loan gets paid off out of the sale proceeds, and whatever equity is left over is yours. No prepayment penalty for selling early.