En español | More than 78,000 reverse mortgages were insured last year by the U.S. Department of Housing and Urban Development (HUD). These federally insured loans, also called Home Equity Conversion Mortgages (HECMs), have become more popular as older Americans are looking to tap the equity in their homes so they can age in place.

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More than 660,000 reverse mortgages were issued between 1990 and 2010. Here are some frequently asked questions about these loans.

Q: What is a reverse mortgage?

A: A reverse mortgage is a special type of loan that allows you to borrow against the equity that you've built up in your home. You must be at least age 62 to qualify. You can put the money toward anything you like, from paying medical bills to making home improvements. Unlike a traditional home equity loan, a reverse mortgage doesn't need to be paid back immediately, perhaps not even during your lifetime. That means no monthly checks to write to your lender. The HECM reverse mortgage program is run by the Federal Housing Administration (FHA).

Q: Can anyone apply for a reverse mortgage?

A: No, you have to be at least 62. You also have to own your home outright or be able to pay off your home with the proceeds from a reverse mortgage. You must live in your home and your home must meet certain criteria according to HUD. Most single-family homes qualify, as do some condominiums, manufactured homes and multiunit structures that meet FHA requirements. 

Q: How do I apply for a reverse mortgage?

A: You can get a reverse mortgage through a reverse mortgage lender. Before you get a reverse mortgage you must meet with a reverse mortgage counselor, and there is a fee associated with that consultation. Usually, that cost (around $125) is rolled into the loan. You can receive the reverse mortgage in a lump sum, a line of credit or monthly payments. The loans are available in adjustable and fixed interest rates. If you choose a fixed interest rate, you will be erquired to take all of your proceeds in a single lump-sum payment.

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