{"id":47801,"date":"2025-07-07T02:00:58","date_gmt":"2025-07-07T09:00:58","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=47801"},"modified":"2025-07-07T22:48:55","modified_gmt":"2025-07-08T05:48:55","slug":"buyer-home-equity-conversion-mortgage","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-home-equity-conversion-mortgage\/","title":{"rendered":"What Is a Home Equity Conversion Mortgage or HECM?"},"content":{"rendered":"

As a homeowner, it\u2019s likely your property is a big part of your retirement plan. If you\u2019re exploring options to make the most of your home\u2019s value in your golden years, you may be considering a home equity conversion mortgage<\/a> (HECM), also known as an FHA reverse mortgage home loan.<\/p>\n

In this post, we\u2019ll break down what a home equity conversion mortgage is, how it works, and what you need to qualify.<\/p>\n

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What is a home equity conversion mortgage?<\/h2>\n

A home equity conversion mortgage is a type of reverse mortgage insured by the Federal Housing Administration<\/a> (FHA). Unlike a traditional mortgage, where you make payments to a lender, an HECM allows borrowers age 62 or older to receive payments from their home\u2019s equity. This can provide a source of income during retirement, helping you tap into the value of your home without needing to sell it.<\/p>\n

\u201cIn today\u2019s market, where many retirees face the challenge of rising costs and longer lifespans, a reverse mortgage offers a way to supplement income without the burden of monthly mortgage payments,\u201d says Cliff Auerswald<\/a>, author and president of All Reverse Mortgage, Inc. \u201cIt\u2019s a solution that I believe can truly make a difference in people\u2019s lives.\u201d<\/p>\n

Since 1990, more than 1.3 million older homeowners<\/a> have used HECM loans to access their home equity. In the first half of 2024, nearly 20,000 homeowners started HECM loans, according to the National Council on Aging (NCOA).<\/p>\n

<\/div>\n

How does a home equity conversion mortgage work?<\/h2>\n

When you take out a home equity conversion mortgage, you borrow against the equity<\/a> you\u2019ve built up in your home. The amount you can borrow depends on several factors, including your age, the value of your home, and current reverse mortgage interest rates.<\/p>\n

Instead of making monthly mortgage payments, the lender pays you. The money can be received in four ways:<\/p>\n

1. As a lump-sum payment<\/p>\n

2. As a series of monthly payments<\/p>\n

3. As a line of credit (similar to a HELOC<\/a> or credit card)<\/p>\n

4. As a combination of monthly payments and a line of credit<\/p>\n

The loan balance increases over time as interest accrues, and it is typically repaid from the sale of the home when you or your heirs are no longer living in the property.<\/p>\n","protected":false},"excerpt":{"rendered":"

Discover expert tips and clear, easy-follow steps to get a home equity conversion mortgage (reverse mortgage). Learn if an HECM is right for you.<\/p>\n","protected":false},"author":298,"featured_media":47809,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,629,632],"tags":[],"class_list":["post-47801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-home-financing","category-mortgage-loans"],"acf":[],"yoast_head":"\nWhat Is a Home Equity Conversion Mortgage or HECM?<\/title>\n<meta name=\"description\" content=\"Discover expert tips and clear, easy steps to get a home equity conversion mortgage (reverse mortgage). Learn if an HECM is right for you.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.homelight.com\/blog\/buyer-home-equity-conversion-mortgage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is a Home Equity Conversion Mortgage or HECM?\" \/>\n<meta property=\"og:description\" content=\"Discover expert tips and clear, easy steps to get a home equity conversion mortgage (reverse mortgage). Learn if an HECM is right for you.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.homelight.com\/blog\/buyer-home-equity-conversion-mortgage\/\" \/>\n<meta property=\"og:site_name\" content=\"HomeLight Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/gohomelight\/\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-07T09:00:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-07-08T05:48:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/hl-blog.homelight.com\/wp-content\/uploads\/2024\/09\/What-Is-a-Home-Equity-Conversion-Mortgage-or-HECM-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"563\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Richard Haddad\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:site\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Richard Haddad\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"16 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What Is a Home Equity Conversion Mortgage or HECM?","description":"Discover expert tips and clear, easy steps to get a home equity conversion mortgage (reverse mortgage). 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