Even though a HECM loan is one of the most common sources of supplementary income for retirees, few people fully understand the details surrounding this reliable reverse mortgage loan type. Discover if a HECM loan fits your needs as we discuss what it is, who can use it, and how to apply.

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What is a HECM Loan?

A HECM loan—or Home Equity Conversion Mortgage—is a reverse mortgage that leverages the home’s equity as supplemental income, which can then be used at the borrower’s discretion to take care of living expenses, medical bills, and more. A HECM loan is unique from other types of reverse mortgages because it is the only one insured by the Federal Housing Administration (FHA) —meaning it offers the most protection to borrowers. Additionally, this type of loan is nonrecourse; therefore, you’ll never owe more than what your home is worth even if your home’s equity drops after receiving the loan.

HECM loan amounts are based upon:

  • Age of the youngest borrower or eligible non-borrowing spouse
  • Current interest rates
  • The home’s appraised value
  • The HECM FHA mortgage limit, which is currently set at $1,089,300


Offering the most protection to borrowers and the most spending autonomy, it’s no wonder that the HECM loan is one of the most popular choices for borrowers. Furthermore, HECM loans are not dependent upon credit score, offering financial requirements that are much more slack than other loans. That being said, there are a few requirements that must be met to receive the benefits of this loan.

To be eligible for a HECM loan, the borrower must:

  • Be 62 years old or older
  • Use the appraised property as their primary residence
  • Have their property approved by the U.S. Department of Housing and Urban Development as a 2–4-unit single-family home, manufactured home, or condominium.
  • Fully own the property or have a small mortgage balance
  • Keep up with all federal debt payments
  • Be able to pay all upfront and ongoing costs, including the required HECM counseling
what is a hecm loan eligibility for retirees

For retirees 62 years or older, HECM loans provide many financial benefits.

How to Apply

The application process for a HECM loan begins by going through an FHA-sponsored bank. To find a bank that meets FHA standards, the U.S. Department of Housing and Urban Development provides an easy-to-use lender list. Follow these simple steps to locate an approved lender near you:

  1. Go to the HUD Lender List Search
  2. Select your state, county, and zip code (you can also choose the radius it will search within)
  3. Scroll down
  4. Uncheck “Title 1 Property Improvement”
  5. Check “HECM”
  6. Click “Search

Millennial Title is Your Partner for HECM Loan Closings

Highly protected, accessible, and flexible, a HECM loan is an excellent source for supplemental income. At Millennial Title, our experienced staff works closely with FHA-approved lenders to ensure your loan closing is completed as smoothly as possible. Contact Millennial Title today to take your first steps towards acquiring a HECM loan.

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