Homeowners 62+ Can Access Tax-Free Cash
Seniors facing high medical bills, credit card debt, or retirement income gaps can borrow against home equity without monthly mortgage payments. A Home Equity Conversion Mortgage lets you convert a portion of your home value into cash, and because it’s loan proceeds rather than income, the IRS doesn’t tax it. Many St. Louis retirees use a HECM to stay in their homes near family instead of relocating. The balance grows as interest accrues, but you make no required monthly mortgage payment.
Your Home Must Meet FHA Standards
Owners of single-family homes, condos, or townhomes — especially older properties — should prepare for an FHA property inspection. An FHA appraiser checks the roof, foundation, plumbing, electrical, and HVAC during the appraisal, and you must repair safety issues before closing. Older homes may need siding or window repairs to pass; the appraiser looks for peeling paint, damaged roofing, broken windows, and faulty systems. We flag likely repair items early so they don’t surprise you.
HECM Counseling Is Required and Protects You
Before applying, you must complete HUD-approved counseling. A roughly one-hour session with a HUD counselor covers loan terms, costs, repayment triggers, and the impact on heirs, and explains how a HECM differs from a traditional mortgage — plus alternatives like a home equity loan or HELOC. You can attend counseling at a St. Louis-area HUD office or complete it by phone. It’s a genuine consumer protection, not a formality.
Fixed-Rate vs. Adjustable-Rate HECMs
Fixed-rate HECMs disburse one lump sum at closing with a locked rate for the life of the loan — you receive the full amount upfront and can’t draw more later. Adjustable-rate HECMs offer credit lines or monthly payments with rates that move with market indexes; you can draw funds as needed, leave unused credit in reserve, or set up scheduled payments. The right structure depends on whether you need money now or flexible access over time.
The HECM Application Takes Four to Eight Weeks
Plan for a four-to-eight-week timeline. It begins once you have your HUD counseling certificate. Next you submit the application with proof of age, income documentation, property tax records, and homeowner’s insurance information. An FHA appraiser determines your home’s market value and verifies it meets property standards, and the report goes to underwriting for the final decision. We keep the documentation moving so the timeline holds.
You Stay Responsible for Taxes and Insurance
To avoid default, you must pay Missouri property taxes on time each year, maintain continuous homeowner’s insurance, and keep the home in good condition — these requirements last the entire loan term. Missing a property tax deadline can trigger a HECM default notice, and letting insurance lapse can too. We make sure you understand these obligations clearly before closing, because meeting them is what keeps the loan secure.
Frequently Asked Questions
How much can I borrow with a HECM?
Your amount depends on your age, home value, current interest rates, and the FHA lending limit. Older borrowers and higher home values qualify for more, and your principal limit is based on the youngest borrower’s age and the appraised value.
Can I get a HECM if I still owe on my mortgage?
Yes, if you have enough equity. The HECM pays off your existing mortgage at closing, and any remaining proceeds are available to you.
Is a HECM different from a regular reverse mortgage?
A HECM is the FHA-insured version of a reverse mortgage, which adds federal protections like non-recourse and required counseling. Most reverse mortgages today are HECMs.
Do I have to make any monthly payments?
Not on the loan itself — there’s no monthly mortgage payment. You do remain responsible for property taxes, insurance, and upkeep.
What happens to the loan when I move or pass away?
It becomes due. The home is typically sold to repay the balance, and non-recourse protection means you or your heirs never owe more than the home’s value.
Learn more about how to get a HECM reverse mortgage — including payout options (lump sum, monthly, line of credit), lender requirements, and obligations borrowers maintain — in How to Get a HECM Reverse Mortgage