This relatively new program allows homeowners to draw tax-free income from their home equity without requiring repayment for as long as they occupy the home. Surveys have shown that the number one goal of seniors is to remain in their homes for as long as possible. Unfortunately, as we become older our savings erode even faster and our monthly cash flow does not keep pace with inflation. Aside from providing flexibility for a wide range of income needs, the growth of the line of credit prevents its value from being eroded by inflation over time. Because fixed income levels often prevent older adults from qualifying for traditional loans, FHA developed the reverse mortgage program to provide a viable option.
Homeowners can use it now to repair a roof, and two years later use it to pay property taxes.
It could even be used to pay off a current mortgage or credit card debts. This FHA program enables older homeowners to translate hard earned home equity into tax-free disposable income with no monthly repayment. The homeowner always retains title to the property and the income received will not affect regular Social Security payments or Medicare eligibility. Eligibility requirements are quite simple and don't impose any standards based on income, assets, credit or employment. Seniors often worry that the expenses of homeownership will force them to lower their standard of living.