HECM, Reverse Mortgage

The Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a specialized program insured by the FHA for homeowners aged 62 or older. It allows seniors to convert a portion of their home equity into cash without having to sell the house or make monthly mortgage payments. Instead of the borrower paying the lender, the lender makes payments to the borrower (either as a lump sum, monthly payments, or a line of credit). The loan balance grows over time as interest and fees accumulate. The loan does not have to be repaid until the borrower dies, sells the home, or moves out of the property permanently.