Full Definition

A reverse mortgage is a federally insured loan product available to homeowners age 62 and older that allows them to convert home equity into cash. Unlike a traditional mortgage, no monthly repayment is required — the loan is repaid when the borrower moves out permanently, sells the home, or dies.

The most common type is the Home Equity Conversion Mortgage (HECM), backed by the federal government through HUD. Proceeds can be taken as a lump sum, monthly payments, a line of credit, or a combination. The amount available depends on the home’s value, the borrower’s age, and current interest rates.

For seniors who need in-home care or want to delay a facility move, a reverse mortgage can provide monthly cash flow to pay for home health aides, modifications, or other services. However, it is not without risks: fees are significant, the loan balance grows over time, and the home will eventually need to be sold to repay the debt — which can affect heirs.

Texas has specific laws governing reverse mortgages, including homestead protections and requirements that both spouses be named borrowers (even if only one is 62). Families should consult a HUD-approved housing counselor before proceeding.