Reverse Mortgage FAQ

What is a Home Equity Conversion Mortgage (HECM)

A Home Equity Conversion Mortgage, more commonly referred to as a HECM, is the most frequently used type of reverse mortgage.  It is insured by the Federal Housing Administration (FHA) protecting borrowers from any interruption in loan proceeds, should the lending institution become unable to fulfill loan obligations.

What is a reverse mortgage?

A reverse mortgage is a type of loan that allows homeowners, 62 years of age or older, to convert part of their home’s equity into tax-free income. According to the U.S. Department of Housing and Urban Development (HUD), many seniors use reverse mortgages to supplement social security, meet medical expenses, and make home improvements.  If you have low or no outstanding mortgage debt, a reverse mortgage may allow you to borrow against the equity in your home. As long as you continue to occupy the property as your primary residence, no payments to the loan will be required.

Is there a fee for reverse mortgage counseling?

There is a fee of $175 to complete reverse mortgage counseling and receive your required certification. That fee is collected at the beginning of your counseling.

Why do I need reverse mortgage counseling?

To be considered for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that you participate in a counseling session with an approved nonprofit housing counseling agency. At completion of the session, the counselor will issue you a certificate that must be provided to the lender you choose to work with. At MMI, we have counselors certified by HUD who specialize in helping consumers, 62 years of age or older, explore and evaluate this financial tool.

How long does the entire reverse mortgage process take?

Should you decide to pursue a reverse mortgage after completing counseling, you must select a reverse mortgage lender and apply for the loan. The first step in the application process is to provide your lender with the certificate issued by your HUD approved reverse mortgage counselor. The entire process generally takes 60-90 days to complete.  Loan processing times may vary, so it would be best to check with your lender for specific loan processing timelines.

I am the only one on the mortgage; does my spouse need counseling?

All persons on the deed must be counseled. In the case of an ineligible or underage spouse, both AARP and FHA recommend counseling.  It is important that all parties involved understand the implications of a reverse mortgage and the risks of relinquishing (quitclaiming) their interest in the property. If you are a non-borrowing spouse, please read the following document: Essential Information for Non-Borrowing Spouses of Home Equity Conversion Mortgage Borrowers.

What can I expect to learn in a reverse mortgage counseling session?

The content of the counseling session is prescribed by federal and other regulations, but the basic goal of the session is quite straightforward. The goal of reverse mortgage counseling is to ensure that you have the necessary information to make an educated decision.  During your counseling session, you and your counselor will discuss:

  • How a reverse mortgage works.
  • The financial and tax implications of entering into a reverse mortgage.
  • The different kinds of options available to borrowers using a reverse mortgage.
  • The costs associated with these kinds of loans.
  • Other options available to the prospective borrower, including housing, social services, health, and other financial alternatives.

The counseling session also offers you the opportunity to ask questions of a trained professional who has no financial interest in whether or not you choose to establish a reverse mortgage.

Is information submitted through this website secure?

Yes, MMI is committed to maintaining your privacy and online confidentiality whether you are filling out an online counseling form or maintaining your account online. Our privacy statement outlines the steps that we’ve taken to ensure that any information or data that you provide is kept confidential and cannot be used improperly.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.