Reverse Mortgage

Home Equity Conversion Mortgage (HECM)

Home Equity Conversion Mortgage (HECM) impact on other benefits

Q: Will HECM payments affect my Social Security, Medicare, Supplemental Security Income (SSI), or Medicaid benefits?

A: HECM payments do not affect your Social Security or Medicare benefits because those benefits are not based on the assets of the recipient. However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits. If you do not spend HECM advances in the month received, then such funds are considered part of your liquid resources and may adversely affect your eligibility for SSI.

Regulations vary for state-administered programs such as Medicaid, AFDC, and food stamps. Therefore, we suggest that you consult a benefits specialist at your local Area Agency on Aging or the local offices for these programs to determine how HECM payments may affect your particular situation.

Q: What are some of my responsibilities as a homeowner with a reverse mortgage?

A: To keep your real estate taxes and homeowners insurance current. And to properly maintain your home so that it's value does not diminish.

Q What if I decide to sell my home?

A: If you choose to sell your home, the outstanding loan balance becomes due and payable to the mortgage lender. You can pay the loan balance with proceeds from the sale of your home, and you or your estate will receive any proceeds exceeding the loan balance.

Q: Can I sell my home to my children and continue to live in it?

A: If you sell your home to your children or any other individual, the HECM will be due and payable at settlement. After the loan is repaid, any arrangement for your continued occupancy of the property must be made with the new owners.

Source: Fannie Mae HECM Consumer Fact Sheet

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