The homeowner continues to own the home and maintain title. The loan typically does not become due until the borrower sells the home, moves out of the home or passes away. The borrower must also continue to meet the obligations of the loan such as paying property taxes and insurance and maintaining the home according to FHA guidelines.

This isn’t a home equity loan. The loan is paid back when you move out of the home, sell it, the last borrower on title passes away or when the borrower fails to meet the obligations of the loan.

You can still leave the home to your children or to anyone you choose to. The heirs can pay off the loan any number of ways, including:

• Selling the house.
• Refinancing the debt.
• Using other funds to pay off the reverse mortgage.

The amount depends on your age; current interest rates; and the lesser of the appraised value of the home, the sale price, or the maximum lending limit.

As with any loan, there are closing and other costs, most of which can be financed as part of the loan.

In general, the money received should be tax-free as it is not considered income by the IRS. The borrower should consult their financial advisor and appropriate government agencies for any effect on taxes or government benefits.

A reverse mortgage loan usually does not affect eligibility for entitlement programs, such as Medicare or Social Security benefits. However, some needs-based government benefits, such as Medicaid and Supplemental Security Income (SSI), may be affected by a reverse mortgage loan. The borrower(s) should consult a qualified professional to determine if there would be any impact to their government benefits.