What is a 62+ Loan?

Have you ever heard of a 62 plus loan, also known as a Home Equity Conversion Mortgage (HECM)? This is a unique type of loan designed for people that are 62 or older. In this type of loan, you would put down a portion of the home, the lender provides the remaining amount, and there are no further payments. The required down payment depends on your age. As your age increases, the down payment decreases.

 The 62 plus Loan Explained:

This all works because this is a reverse mortgage loan that’s funded by the government. The perks are that you can do a cash purchase without needing lots of money. There is a flexible repayment plan and it offers a non-recourse feature. This means that your debt won’t become higher than the worth of your home. You also have six different ways of receiving proceeds from this mortgage.

You can get a lump sum, (you get all your proceeds when the loan closes), equal monthly payments (lender makes steady payments to you), term payments (lender gives payments for a set period of time), line of credit (money is available for you to borrow as needed),

Equal monthly payments plus a line of credit (lender makes regular payments to you and you can access a line of credit if you need more money), or term payments plus a line of credit (lender gives payments for a set period of time and you can access a line of credit).

How do you Qualify for the 62+ loan?

First, you need to be 62 or older. If your spouse is younger, fear not! As long as one party meets the age requirement, you’re all set! So when looking at the best places to retire in the US or staying right at home, only one party needs to be over 62.  If you’re refinancing, you need to own 55-65% equity in the home. If you’re purchasing, you’ll need to pay an equal amount down.

Single-family home, 2-4 unit property:

The property must be your primary residence, and it needs to be a single-family home, 2-4 unit property, or HUD-approved condo. While you won’t be responsible for a monthly payment, you’ll still need to pay property taxes, insurance, HOA fees, and maintenance fees.

You also must live in the home for the rest of your life or until the last person of the party dies or vacates the property. From there, the heirs to the house have a few options. They can sell the house to pay off the debt, surrender the home to pay the debt, or pay off the remaining debt and keep the home.


If home equity isn’t the most important thing to you and you value putting your money elsewhere to save, this may be a good loan. It guarantees stability and a home where you don’t have to worry about regular payments. You’ll know too that the home will eventually satisfy the debt and, as long as you meet all the requirements, the home will not be taken away from you. If you’re considering finding your permanent retirement home, the 62+ loan may be one that you want to look into.


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