Reverse mortgages are specialized loans available to homeowners age 62 and older. Over the years they have become a useful financial tool for a wide range of retirees, from those looking to supplement a fixed income, to homeowners who want to protect other retirement assets, or even those planning to purchase a new home later in life.

But while reverse mortgages can be flexible, there are still some important requirements when it comes to the property itself.

Which Types of Homes Are Eligible?

According to the Federal Housing Administration (FHA), which insures most reverse mortgages through the Home Equity Conversion Mortgage (HECM) program, several types of homes may qualify.

Eligible properties generally include:

• Single-family homes

• Two- to four-unit homes, as long as the borrower occupies one of the units as their primary residence

• Certain condominiums, provided the project meets FHA approval guidelines

• Some manufactured homes, if they meet HUD construction and foundation standards

These requirements help ensure the home meets federal property standards and maintains long-term value.

Using a Reverse Mortgage to Purchase a Home

Many people are surprised to learn that reverse mortgages can also be used to purchase a home. Through the Reverse Mortgage for Purchase program, eligible borrowers can buy a qualifying property and eliminate monthly mortgage payments.

Homes purchased using this option typically must be:

• A single-family home or approved condominium

• A two- to four-unit property where the borrower occupies one unit

• Fully completed construction with a certificate of occupancy

This program has become increasingly popular for retirees who want to downsize, relocate, or move closer to family without taking on a traditional mortgage payment.

Why Might a Home Not Qualify?

While many homes are eligible, there are situations where a property may not meet reverse mortgage guidelines.

For example:

• Very little home equity may limit eligibility, although homeowners can still qualify even if they currently have a traditional mortgage balance.

• The property must meet basic maintenance and safety standards. Significant repairs or deferred maintenance may need to be addressed before the loan is finalized.

• The home must be the borrower’s primary residence. Vacation homes or investment properties do not qualify.

Borrowers must also remain current on ongoing home-related expenses such as property taxes, homeowners insurance, and HOA dues if applicable.

Reverse mortgages allow homeowners to convert a portion of their home equity into funds that can be accessed in several ways, including a lump sum, monthly payments, or a line of credit. They can also be used as part of a home purchase strategy later in life.

Because every situation is different, it’s helpful to speak with a knowledgeable reverse mortgage specialist who can review your property, explain the options available, and help determine whether your home meets the program guidelines.

Jan and Kelsey are Reverse Mortgage Specialists serving the Erie, Dacono, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming.  Contact Jan and Kelsey to learn if a reverse mortgage is right for you.

If you’re 62 or older and planning to build or buy a newly constructed home, you may be surprised to learn that you can use a reverse mortgage to finance that purchase. It’s called a Reverse Mortgage for Purchase or a HECM for Purchase (Home Equity Conversion Mortgage for Purchase), and it offers a unique opportunity to buy your next home—custom or otherwise—without the burden of monthly mortgage payments.

Buying a New Build with a Reverse Mortgage

A reverse mortgage for purchase lets qualified buyers put down a one-time investment (similar to a large down payment), and use the reverse mortgage to finance the rest. The homeowner moves in once the property is complete and lives mortgage payment–free for as long as they remain in the home.

Unlike traditional financing, repayment isn’t due until the last borrower moves out permanently or passes away. The homeowner always retains the title, just like with any other home purchase.

This type of reverse mortgage can be used for:

• A custom-built home on your own lot

• A newly constructed home in a retirement community

• A new home in a subdivision or development

• Townhomes or FHA-approved condos, including brand-new units

What to Know About the Process

You can begin the reverse mortgage application process before construction is completed—as long as you’re working with an experienced lender familiar with reverse mortgage loans. While the loan won’t close until the home has received a Certificate of Occupancy from local authorities, starting the paperwork early can help streamline your timeline and lock in your plans.

Once construction is complete and the home is deemed move-in ready, the reverse mortgage can be finalized. You’ll bring your “required investment” to the closing table. After closing, there are no monthly mortgage payments required. You’ll just need to continue covering property taxes, homeowners insurance, utilities, HOA fees (if applicable), and routine maintenance.

Why This Option is a Fit for Retirees

Many older adults are choosing to build homes that fit their long-term needs—single-level layouts, wider hallways, minimal stairs, and energy-efficient features. A reverse mortgage for purchase makes that dream possible without draining retirement savings or relying on traditional financing.

It also supports aging in place by giving seniors the flexibility to move into a home designed for comfort and accessibility while preserving cash flow. This is especially helpful in places like Northern Colorado, where housing demand and construction of retirement-oriented communities continue to grow.

Jan Jordan and Kelsey Jorck are Reverse Mortgage Specialists serving Fort Collins, Loveland, Greeley, Longmont, Dacono, Erie, Boulder, and surrounding areas across Colorado’s Front Range.  Click here to contact them and learn if reverse mortgage is right for you.

Many older adults in Northern Colorado want to buy a new home that fits their needs, like a smaller house or one easier to get around in. For people 62 and older, a reverse mortgage can make this easier without monthly mortgage payments. 

A reverse mortgage, also called a Home Equity Conversion Mortgage (HECM), lets people 62 and older use their home’s value to get money. Instead of you paying the bank, the bank pays you – either all at once, monthly, or as a credit line you can use when needed. And the Reverse Mortgage for Purchase program can also help you buy a new home using a HECM reverse mortgage.  You repay the loan when you sell the home, move out, or pass away – and it’s insured by the FHA meaning there are many protections in place.

The National Association of Realtors® 2024 Profile of Home Buyers and Sellers report says many home buyers are older—half are around 61 years old. In Northern Colorado, places like Fort Collins and Loveland are great for retirees, with nice communities and outdoor activities. 

The NAR also found 17% of buyers want homes for multiple generations, like living with family. A reverse mortgage can help older adults afford a new home that works for them without monthly payments.

Here’s why reverse mortgages are useful for older home buyers in Northern Colorado:

1. No Monthly Mortgage Payments: You don’t pay monthly mortgage bills, which helps if you’re on a fixed income. You still cover taxes and insurance, but it frees up money for other things.

2. Use Your Home’s Equity: Many older adults have equity in their current home. You can use it for a down payment on a new home, so you don’t need a lot of cash.

3. Pick the Right Home: You can buy a single-family home, condo, or other property that meets HUD rules. This is great for downsizing or getting a home with no stairs.

As part of the reverse mortgage process, the FHA requires you talk to a third party counselor to learn how it works, which helps you decide if it’s right for you. If you have questions about how the process works or anything else, feel free to reach out. 

In this day and age, buying a home with cash is rare.  And not because of the reasons you may think – such as who has that much cash nowadays?  Well, that is part of the reason, but it’s a little more complicated than that.  Those who have a substantial amount of cash are finding there are no homes available in their price range and suddenly they don’t have enough cash to be a true “cash buyer”.  This diminishes their hopes of living mortgage payment free.  For example, if a retired couple sells their home or allots other funds amounting to $170,000 for a new home, they will suddenly be facing a new dilemma – finding a home to meet their needs, that doesn’t need repairs, and is in the community they wish to live.  With home prices dramatically increasing in the across Northern Colorado, this scenario is playing out ever more often.

This is where the Reverse Mortgage for Purchase program can provide a solution.  Not only will the program add funds to the buyer’s available cash making up the difference needed to purchase an appropriate home, it will also allow that buyer to live mortgage payment free.  In addition, putting all your cash into one asset can be a scary thought, especially later in life when the future is largely an unknown, and security is a necessity.  When adding a reverse mortgage into the equation, cash home buyers can consider keeping some of the cash or invest it elsewhere.

Here’s how it works:

For seniors 62 and over, home buyers are able to use a reverse mortgage to purchase a home.  The amount of the down payment required from the buyer will depend on the amount of the home they are purchasing.  But unlike a conventional loan, not only will the lender provide the funds to make up the difference between the home price and the down payment, the buyers will be able to live mortgage payment free for as long as they remain in the home.  This frees up income for other things – such as secure retirement living, medical expenses, in home care, vacations, or anything else they may desire.  A Reverse Mortgage for Purchase can be used to buy single family homes, town homes, and FHA approved condos.  New construction can be purchased, but it must have a Certificate of Occupancy before the loan application can be accepted. The home being purchased will need to be the buyer’s primary residence and the required down payment will need to come from a HUD approved source.  And just like a conventional mortgage, the buyer will always retain the title to the home.

Jan and Kelsey are Reverse Mortgage Specialists serving the Erie, Dacono, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming.  Contact Jan and Kelsey to learn if a reverse mortgage is right for you.

Baby boomers are buying homes at a faster rate than millennials for the first time ever, but this trend also comes with an increasing amount of debt near retirement age. While owning a home can be a valuable asset, carrying debt into retirement can create financial stress and strain. However, there is a solution that can help baby boomers purchase a home without taking on excessive debt: the reverse mortgage for purchase.

A reverse mortgage for purchase allows older adults to buy a home and finance the purchase with a reverse mortgage. With this option, baby boomers can purchase a home without taking on a large amount of debt and can often also supplement their retirement income with the payments received from the reverse mortgage.

One of the primary advantages of a reverse mortgage for purchase is that it can provide a way for baby boomers to buy a home without draining their retirement savings or taking on additional new debt they must immediately pay. With traditional mortgages, borrowers are required to make monthly payments, which can be difficult to manage on a fixed income. However, with a reverse mortgage for purchase, the borrower receives payments based on the equity in the home, which can help them maintain their financial stability and avoid excessive debt.

Moreover, a reverse mortgage for purchase can also provide a way to downsize or move into a more suitable home or location without incurring excessive debt. For example, if a baby boomer wants to move into a smaller home that’s more affordable or move closer to family, a reverse mortgage for purchase can provide a way to do so.

Learn more about the creative financial Reverse Mortgage for Purchase tool here. And if you’re home shopping and your realtor hasn’t mentioned a reverse mortgage for purchase, ask them, or reach out to Jan Jordan or Kelsey Jorck for more info. 

Jan Jordan and Kelsey Jorck are Reverse Mortgage Specialists serving the Erie, Dacono, Fort Lupton, Windsor, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado.  Contact Jan and Kelsey to learn if a reverse mortgage is right for you.

 

Reverse Mortgages, once typically thought to only help struggling seniors, have undergone enormous changes recently and are being used to help even affluent retirees achieve their retirement dreams and home buyers purchase new homes.

The Reverse Mortgage for Purchase program is quickly gaining in popularity. This program allows seniors to purchase a home using a reverse mortgage and live mortgage payment free. To qualify for this program, borrower(s) simply need to be age 62 or older, be purchasing a home to become their primary residence, and have their “required investment”. The borrower will still be the homeowner and will always retain the title. In addition, similar to a homeowner who owns their home free and clear, there will not be a monthly mortgage payment but the borrower will still be required to pay property taxes, homeowner’s insurance, HOA fees, and basic upkeep and utility payments.

The borrower can use this loan to purchase single family homes, town homes, and FHA approved condos, and even homes under construction.

As mentioned above, the borrower will need to have their “required investment” or down payment. This amount is determined by a calculation set by HUD based on: the lesser of the sale price or appraised value, the age of the youngest of the borrowers, and the current expected interest rate. There are many examples available of these numbers to help real estate professionals and borrowers determine the price bracket they should search based on the required investment they have available.

Unlike a traditional mortgage where the loan reaches a “maturity date”, reverse mortgages have a “maturity event”. This is the event which causes the loan to become due and payable. These “events” include: the last remaining borrower passes away, the homeowner sells the home, the last remaining borrower leaves the home for 12 consecutive months, or the homeowner defaults on property taxes or insurance.

Prior to being approved for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires each borrow to participate in a counseling session with an approved agency. These not-for-profit agencies are funded by the federal government and work closely with both the FHA and lenders to ensure a smooth process. The goal of this session is not to steer a potential borrower in one direction or another, but to make sure they clearly understand all aspects of a reverse mortgage.

Jan and Kelsey are Reverse Mortgage Specialists serving the Erie, Dacono, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming.  Contact Jan and Kelsey to learn if a reverse mortgage is right for you.