5 things to know about reverse mortgage loans if you own a 2nd home


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Through the Federal Housing Administration, the U.S. Department of Housing and Urban Development offers seniors a way to supplement retirement incomes through its home equity conversion mortgage, commonly called a reverse mortgage loan.

What the heck is a HECM?

A home equity conversion mortgage, or HECM, is FHA’s reverse mortgage loan program, enabling seniors to withdraw some of the equity in their home if they need money.

Instead of making mortgage payments, qualifying senior homeowners get payments from the lender based on their primary home’s equity. (They’re still responsible for taxes, insurance and other expenses.)

In the superheated mortgage environment preceding the Great Recession, a few banks independently experimented with reverse mortgage loans for second homes. That didn’t last long.

“There was a very small proprietary market for those loan products at one time, but they are no longer offered (on second homes),” says Jenny Werwa, spokesperson for the National Reverse Mortgage Lenders Association.

Here’s what to consider about reverse mortgage loans if you own a second home.