If I take out a reverse mortgage loan, does the lender own my home?

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. Just like a traditional mortgage, with a HECM you are borrowing money and using your home as security for the loan. You must continue to pay for property taxes, homeowner’s insurance, and make repairs needed to maintain your home or the lender can foreclose on the home. HECMs also require you to use the home as your principal residence.

Note: This webpage has information about HECMs, which are the most common type of reverse mortgage.

If you move out, sell your home, or the last surviving borrower or eligible non-borrowing spouse dies, you or your estate will need to repay the HECM loan, but you will never owe more than the value of the house.

The loan balance will include the amount you have received in cash, plus the interest and fees that have been added to the loan balance each month. To repay the loan, you or your heirs may have to sell the house.

Read more about what happens to your reverse mortgage when you die or need to move to a nursing home.