Other Reverse Mortgage Programs

While the HECM is the most common reverse mortgage used, there are other types of reverse mortgages available:

  • Deferred payment loan. These are one-time, lump sum reverse mortgages provided by some local and state governments. Usually these programs are only available to homeowners with low or moderate income, and they may require a minimum borrower age. The deferred payment loan can only be used for specific repair projects allowed by each particular program. The interest rate is usually fixed, and in some programs all or part of the loan is forgiven after you have lived in your home for a certain number of years.
  • Property tax deferral loans. Like deferred payment loans, these loans are offered by some local and state governments. These loans can only be used to pay your property taxes.
  • Proprietary reverse mortgages. These are reverse mortgages created by private companies (who may let several lenders offer their programs) and not insured by the federal government. In general, they are still restricted to homeowners 62 and over, but the companies have more control over what features they offer than with the HECM. Homeowners with highly-valued homes may be able to get more money from a proprietary reverse mortgage than a HECM. However, proprietary reverse mortgages tend to cost more, and for the line of credit option the amount available usually does not grow over time, unlike with the HECM.

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