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Reverse mortgage guide
In a divorce after 60, a reverse mortgage may let the spouse who keeps the home pay off the existing mortgage and put money toward buying out the other spouse's equity, with no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. The spouse who leaves may be able to use a HECM for Purchase to buy their next home the same way, with the same obligations. Whether the numbers work depends on age, home value, rates, the existing mortgage, and how the divorce decree is written, so bring this up before the settlement is final.
In a lot of divorces, people hear about two options first. Sell the home and split whatever's left. Or have one spouse refinance to buy the other one out.
If you're anywhere near retirement, neither one feels great. Selling means starting over in a housing market that looks nothing like the one you bought into. And a brand-new 30-year mortgage payment, on one income, is a hard thing to take on at this stage of life.
For homeowners who qualify, there's another tool worth putting on the table. It doesn't replace legal advice, and it doesn't fit every situation. But it's an option people often don't explore early enough in the divorce process. It's worth understanding before a settlement gets finalized, not after.
When a marriage ends earlier in life, both spouses usually have 20 or 30 years of income ahead of them to rebuild. At 60, 65, or 70, that runway is much shorter. For a lot of long-married couples, most of what they've built isn't sitting in a brokerage account. It's sitting in the house.
That changes what's really at stake. Dividing the home isn't like dividing a car or a bank account. It's dividing the thing that was supposed to carry both people through retirement. That's why grey divorce settlements involving real estate tend to be more complicated, and more consequential, than settlements at younger ages.
A reverse mortgage lets a homeowner use the equity in a property without a required monthly principal and interest payment. The loan is repaid when you sell, when the home is no longer your primary residence, or if you don't meet the loan terms, like keeping up with property charges and maintaining the home.
That doesn't mean the loan is free. Interest builds over time, and on a HECM, mortgage insurance does too, so the balance grows. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms, including HOA or condo dues where they apply. What goes away is the monthly mortgage bill, often the single biggest fixed cost in a household budget.
For someone going through a divorce on a fixed or reduced income, removing that payment while still tapping home equity can change what's actually possible in a settlement. For the basics, see How a Reverse Mortgage Works.
This isn't a single age cutoff. Understand both products before you assume only one applies.
HECM (Home Equity Conversion Mortgage). For homeowners 62 and older. This is the FHA-insured reverse mortgage most people have heard of.
Proprietary (jumbo) reverse mortgage. Offered by private lenders, not insured by FHA. Ages, availability, and terms vary by program and by state. Some programs accept borrowers as young as 55 in some states. In Texas, HomeSafe Standard requires borrowers to be 62, and the Texas Constitution requires the borrower or the borrower's spouse to be at least 62. Finance of America's HomeSafe Standard requires borrowers in Washington to be at least 60. On higher-value homes, a proprietary loan can sometimes provide more money than a HECM. We compare several of these programs side by side. See Proprietary (Jumbo) Reverse Mortgages.
Turning 62 doesn't limit you to a HECM. The better fit depends on the home's value, current rates, and what the settlement actually requires.
On a HECM refinance, HUD limits how much of your available money you can take in the first 12 months. Generally it's about 60 percent of the principal limit, unless you need more to pay "mandatory obligations" at closing, like paying off the existing mortgage. The rest becomes available after the first year.
In a divorce, the question is whether the buyout itself counts as one of those obligations. If it does, more money may be available at closing. If it doesn't, the buyout may have to come from the 60 percent, and that can leave a gap.
Here's a hypothetical example. Linda and Robert have been married 30 years and are getting divorced. Linda wants to stay in the home where they raised their family. Robert's name is also on the title, so as part of the settlement, Linda owes him his share of the home's equity.
Without a reverse mortgage, Linda faces two hard choices. She can pull the buyout from retirement savings she can't easily replace. Or she can refinance into a new monthly mortgage payment she'd carry alone, on one income.
If Linda qualifies, a HECM or a proprietary reverse mortgage may let her pay off the existing mortgage and put money toward Robert's buyout as part of the settlement.
Whether a divorce buyout can qualify for a larger first-year amount on a HECM depends on how it's set up under HUD's rules and on the lender's guidelines. Different wholesale lenders genuinely take different positions on this.
Some lenders may accept the final divorce decree as the payoff demand for the buyout. Others may want a lien recorded against the home for the buyout, along with other conditions tied to that lien. Most will want the decree to state clearly that the home was awarded to the spouse keeping it.
This is exactly why settlement language matters. It's also why working with a broker who shops more than one wholesale lender can change what's possible. One lender may reject a buyout structure that another approves, reviewing the very same decree.
Before closing, lenders generally want the divorce to be final and the home to be in the name of the spouse who's keeping it. That usually means a recorded deed from the departing spouse, as the decree directs.
Timing also affects who counts as what on the loan. If you apply while you're still legally married, your spouse is a non-borrowing spouse in HUD's eyes, even if you're separated. See I am legally separated. Is my husband required to be on the loan? Once the divorce is final, your ex-spouse isn't part of the loan at all.
Proprietary is worth comparing here too, and not only for borrowers under 62. Some proprietary programs don't have the same first-year limit, which matters if Linda needs a large lump sum at closing.
A few other factors affect the numbers no matter the lender:
A HECM is non-recourse. If the home eventually sells for less than the loan balance, Linda and her heirs don't pay the difference. That protection is real. But it doesn't remove the need to structure the settlement and the loan correctly before the decree is final.
Robert is getting his share of the equity, but he still needs a place to live. After a divorce, another 30-year mortgage payment is often the last thing he wants.
A HECM for Purchase lets Robert put part of his settlement toward his next home and cover the rest with a reverse mortgage instead of a traditional one.
Be clear on this: a reverse mortgage covers only part of the price, based on Robert's age and current rates. Robert still needs cash for the difference between that amount and the price plus closing costs. This isn't a zero-down purchase.
What Robert avoids is a required monthly mortgage payment going forward. And because the loan money goes straight into the purchase at closing, the first-year limit generally doesn't hold back the purchase funds the way it can on a refinance.
The same rules apply to Robert. At 62 or older, he can look at a HECM for Purchase, and he may want to compare a proprietary purchase program, especially on a higher-value home. If he's younger than 62, a proprietary program may be his only reverse mortgage option, where available. Either way, the goal is to land Robert in a home that fits his retirement income, not one that fights against it.
Stepping back, this scenario uses two separate reverse mortgages to solve two sides of the same divorce. Linda may be able to stay in the home she wanted to keep. Robert can move into a new home without recreating the payment pressure the divorce was supposed to relieve.
There's a tradeoff worth naming honestly. Keeping the family home can feel familiar and safe. But it also puts a big share of Linda's retirement in one property. Weigh that against her cash flow, her health care plans, and how long she really intends to stay, not just whether she can technically afford to keep it. Sometimes the right answer is for both of them to sell and buy smaller.
This is educational information, not legal, tax, or investment advice. A reverse mortgage is a loan secured by the home. It may not cover a full equity buyout, and the borrower must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms for as long as the loan is outstanding.
Before any of this goes into a settlement, bring in your divorce attorney, a tax professional, and a reverse mortgage professional, ideally together rather than one after another. Here's a short list to cover:
In many cases, yes. A HECM or proprietary reverse mortgage may let the spouse keeping the home put equity toward the other spouse's share. Whether the full amount is available depends on the lender, the home's value, and how the settlement is written.
Every HECM borrower must be at least 62. Some proprietary programs accept borrowers as young as 55 in some states. In Texas, HomeSafe Standard requires borrowers to be 62, and the Texas Constitution requires the borrower or the borrower's spouse to be at least 62. HomeSafe Standard requires 60 in Washington.
Not always on a HECM refinance. HUD generally limits first-year draws to about 60 percent of the principal limit unless more is needed for mandatory obligations, and whether a buyout counts depends on how it's set up under HUD's rules and how the lender documents it. Some proprietary programs handle this differently.
No required monthly mortgage payment comes with a reverse mortgage. The homeowner must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Yes, with a HECM for Purchase or a proprietary purchase program. The buyer covers the difference, plus closing costs, from settlement funds or other cash.
No. It depends on age, home value and equity, rates, the existing mortgage, the decree, and the lender's guidelines. Look at it case by case, ideally before the settlement is final.
A broker can shop the same scenario across more than one wholesale lender. Lenders don't all handle divorce buyouts the same way, so a setup one lender turns down may work with another.
You're still legally married, so your spouse would be a non-borrowing spouse if you applied now. Many people wait until the divorce is final. See I am legally separated. Is my husband required to be on the loan?
If you're in the middle of this, call us at 530-888-6000 or get your estimate. I'm glad to talk with you and your attorney together.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
