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Reverse mortgage guide
Many homeowners use a reverse mortgage to pay for in-home care so they can keep living at home. A line of credit lets you draw money as care needs grow, and monthly payouts can cover a regular caregiver schedule. There are no required monthly mortgage payments, but you must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. The home has to stay your primary residence, and if care later means living in a facility for more than 12 consecutive months, the loan can come due. Plan for that, and for how loan money affects Medicaid or SSI, before you draw.
Most people I talk with want to stay in their own home as they age. In-home care is often what makes that possible, but it's expensive, and the cost has a way of growing just when your income doesn't.
A reverse mortgage is one way to pay for it. It isn't right for everyone, and there are a few rules you have to plan around. Here's how to think it through, with your family.
Medicare generally doesn't pay for long-term custodial care at home, like help with bathing, dressing, or meals. Medicaid can help, but only once your income and assets are low enough, and the rules vary by state. Long-term care insurance helps if you bought it years ago, and many people didn't.
That leaves a lot of families paying out of pocket, often from savings or from adult children. For a homeowner, the house is frequently the biggest asset left. A reverse mortgage is a way to use that asset while still living in it.
Care needs rarely start big. Maybe it's a few hours a week at first, then a few hours a day. A HECM line of credit fits that pattern. You draw what you need, when you need it, and pay interest only on what you've drawn.
The unused part of the line grows over time, at the same rate as the loan balance. That's why some people open one early, before care is needed, and leave it alone. See the standby line of credit strategy.
And unlike many bank HELOCs, a HECM line of credit can't be frozen or reduced by the lender as long as you meet the loan terms. Compare them in HECM vs. HELOC.
If you know you'll need a caregiver several days a week, monthly payouts can match that bill. A tenure plan pays for as long as you live in the home and meet the loan terms. A term plan pays for a set number of years. You can also combine monthly payouts with a line of credit.
On an adjustable HECM, you can generally change your payout plan later, for a small fee, as needs change.
If you still have a mortgage, the reverse mortgage pays it off at closing. That monthly payment goes away, and the money can go toward care instead. There are no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Grab bars, a walk-in shower, a ramp, wider doorways, a first-floor bedroom. Modifications like these can be the difference between staying home and moving out, and they can be paid for from the loan.
A reverse mortgage requires the home to be your primary residence. If you live in a health care facility, like a nursing home or assisted living, for more than 12 consecutive months, the loan can become due.
That's the rule to plan around. If in-home care works for years, great. But if care needs eventually require a move, the home may need to be sold or the loan repaid. Talk about that possibility with your family now, while there's time to plan.
If your spouse is an eligible non-borrowing spouse, and you've been in a health care facility for more than 12 consecutive months, the loan's due date can generally be deferred so your spouse can keep living in the home, for loans with case numbers from August 4, 2014 on. Your spouse must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
But no more money is paid out during a deferral period. If your spouse will need care money later too, plan for it. See the Non-Borrowing Spouse guide.
Reverse mortgage money is a loan, not income. But for SSI and most state Medicaid programs, money you borrow and don't spend in the month you receive it can count as a resource starting the next month. If that pushes you over the limit, benefits can be affected.
A few practical habits help:
Medicaid also has estate recovery and asset transfer rules that can interact with your home and your plan. That's a conversation for an elder law attorney. See Will a reverse mortgage affect my Social Security or Medicare benefits?
When someone is focused on care, it's easy to let a property tax bill or an insurance renewal slip. Don't. Falling behind on property taxes or homeowners insurance can make the loan come due. Set up reminders, or ask a family member to keep an eye on them. If the lender's review shows a risk, part of the loan can be set aside to pay those bills for you. See Reverse Mortgage Financial Assessment.
You'll also confirm once a year that you still live in the home. Make sure someone knows to watch for that letter.
The balance grows over time, which leaves less equity for your heirs. For many families, that's a fair trade for letting a parent stay home. But it should be a family decision, not a surprise. See Reverse Mortgages and Heirs.
A reverse mortgage works best as one part of a plan. Look at these too:
Your HUD-approved counselor will walk through alternatives too. See Reverse Mortgage Counseling.
Sadly, people who need care are targets. Be careful with anyone who:
HUD rules bar lenders from requiring you to buy other products to get a HECM. If something feels off, slow down and call someone you trust.
Yes, it's your money to use as you choose. Keep good records, and talk with a benefits professional, especially if Medicaid could come into play later.
Short stays don't make the loan due. The rule is more than 12 consecutive months in a health care facility. Let your servicer know if you'll be away for a long time.
Often, yes, as long as you live in the home as your primary residence and meet the other requirements. The lender will review your income, credit, and ability to keep up with property charges.
For most care situations, a line of credit or monthly payouts fit better than a lump sum. Money left in the bank can count against Medicaid or SSI limits, and the unused line grows.
Care providers can share information about reverse mortgages, but the decision should be yours and your family's. If you work with a care provider, see For Senior and In-Home Care Providers.
If you're planning for care, let's talk through your timeline and budget. I'll show you how a line of credit or monthly payouts would work for you, and whether a reverse mortgage makes sense at all. Get your estimate or call us at 530-888-6000.
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).
