• A reverse mortgage is a loan to a senior citizen who owns a home, or has substantial equity in their home. Payment occurs in monthly payments or a lump sum, depending on the terms of the reverse mortgage. Repayment of the loan is required at the senior's death or the sale of the home.
  
  

States Allowing Reverse Mortgages

• Texas was the last holdout of states allowing reverse mortgages. Until 1997, Texas did not allow a second mortgage on a homestead. A constitutional amendment was required to allow a line-of-credit advance on a reverse mortgage in Texas. Voters approved this amendment in 2003, and now all states allow reverse mortgages.
  
  

Lenders

• States vary in regulating reverse mortgage lenders. Some states require specific approval and acceptance for a reverse mortgage lender's license. The National Reverse Mortgage Lenders Association is an educational resource and policy advocate for reverse mortgage lenders and related professionals. The U.S.Housing and Urban Development website provides a look-up interface to identify lenders who have worked with HUD in the last year.
  
  

Counseling

• The Federal Home Administration and Housing and Urban Development require counseling of seniors prior to signing a reverse mortgage. Arizona, for instance, requires that lenders provide a list of counselors to seniors prior to accepting a borrower application.
  
  

Borrower Requirements

• Some requirements are the same in all states. Seniors must be 62 to qualify for a reverse mortgage, and that requirement includes anyone on the mortgage---so if you have a younger spouse on the mortgage, you may not qualify. You must live in the home under the restrictions and the ceiling for a reverse mortgage is $625,000. When the mortgage funds arrive, you must pay off any lien with the funds.