HUD Archives: News Releases

HUD No. 07-089
Steve O'Halloran
(202) 708-0980
For Release
June 20, 2007

Tenfold increase in HECMs over the last 6 years

WASHINGTON - More seniors than ever before are reaping the benefits of reverse mortgages to enjoy their golden years. New data from HUD reveals that more than 300,000 seniors have used the federally-insured Home Equity Conversion Mortgage (HECM) loan program to convert the equity in their home into cash without having to move.

"For some senior citizens on fixed incomes, reverse mortgages are a great way to cash in on their home equity to make needed repairs, pay unexpected medical bills or just to supplement their retirement. Seniors shouldn't have to choose between taking out a loan to fix up their home and putting food on the table. With a reverse mortgage, this difficult decision is a thing of the past," U.S. Housing and Urban Development Secretary Alphonso Jackson said.

Insured by HUD's Federal Housing Administration (FHA), HUD's reverse mortgage loans require that the borrower be a homeowner, 62 years of age or older; own one's home outright, or have a low mortgage balance, and must live in the home. Reverse mortgage recipients are also required to participate in HUD-approved housing counseling programs before obtaining the loan.

Since 1990, more than 308,000 senior homeowners have used HUD's reverse mortgage program, which covers almost 90 percent of the reverse mortgage market, to borrow against the equity in their homes, making cash readily available to cover necessary expenses. There has been a 10-fold increase in the number of reverse mortgage loans backed the FHA between 2000 and 2006. More than 76,000 seniors obtained a reverse mortgage through HUD in 2006, compared to just 6,637 people in 2000. The number of HECM's insured by the FHA has steadily increased over the past 17 years, with the largest increases coming over the past six years. The FHA insured 18,084 loans in 2003 and more than doubled that amount to 37,789 in 2004. In 2007, the FHA has already backed 69,833 loans, putting the HECM program on pace to surpass its 2006 total this summer.

Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer maintains the home as their principal residence. If the homeowner has an existing mortgage on the home, it will be paid off with proceeds from the reverse mortgages. The remaining equity can be distributed as a lump sum, on a monthly basis, or on an occasional basis as a line of credit.

Reverse mortgage are the bright spot in today's housing market, and their significance will only increase as more baby boomers reach retirement. Today, more than 34 million Americans are over age 65, according to the Census Bureau. By 2030, Americans 65 and older are expect to number almost 70 million and to represent 20 percent of the population.

To help more seniors take advantage of reverse mortgages, HUD's Government National Mortgage Association (Ginnie Mae) is also creating a HECM mortgage-backed security that will allow FHA-insured reverse mortgages to be used as collateral to back Ginnie Mae securities. This change will expand the reverse mortgage business and should provide seniors with lower rates by allowing mortgage lenders to obtain a better price for their loans in the secondary market.

"As retiring baby boomers become eligible, reverse mortgages will continue to gain in popularity. Seniors are looking for financial independence and security late in life, and reverse mortgages continue to be their best bet," Jackson added.


HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and For more information about FHA products, please visit

Content Archived: May 10, 2010