As more seniors choose to age in place in manageable, low-maintenance housing, townhomes and condominiums have become increasingly popular. Fortunately, reverse mortgage options have kept pace, especially since a key change by the Federal Housing Administration (FHA) made it easier to secure a HECM Reverse Mortgage on these types of homes.

Townhomes and condos offer many advantages for retirees: smaller footprints, less upkeep, and often a sense of community. But prior to 2019, it was difficult for many condo owners to qualify for a reverse mortgage unless the entire complex had FHA approval. This requirement excluded a large number of otherwise eligible seniors.

That changed when the FHA revised its policy to allow single-unit approval, making reverse mortgages far more accessible for condo and townhome owners. In 2025, that expanded access continues to benefit retirees throughout Colorado and across the country.

In addition to refinancing an existing townhome or condo, seniors can also use a HECM Reverse Mortgage for Purchase to buy a new home that better suits their needs. Whether downsizing, relocating to a more accessible space, or getting closer to family, this option allows eligible seniors to buy a new residence without taking on a monthly mortgage payment.

Getting a reverse mortgage on a townhome or condo in 2025 involves several key steps:

1. Age & Eligibility
   Borrowers must be at least 62 years old, and the property must be their primary residence.

2. Property Approval
   The unit must meet FHA guidelines, but thanks to single-unit approval, this step is more flexible than in the past for townhomes and condos.

3. Counseling Requirement
   All borrowers are required to complete a HUD-approved counseling session to ensure they fully understand the terms and responsibilities.

4. Appraisal & Loan Terms
   A certified appraiser will assess the home’s value. The amount available to the borrower depends on age, interest rates, and available equity.

5. Fund Disbursement
   Seniors can access funds as a lump sum, line of credit, monthly payments, or as part of a home purchase.

For seniors living in or looking to move into townhomes and condos, reverse mortgages continue to be a flexible, FHA-insured option to access home equity without monthly mortgage obligations. As more retirees seek lifestyle-friendly housing options, the ability to tap into home equity on smaller properties is helping to make aging in place both practical and empowering.

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.