A retiree who has lived in Bowie for a long time requested a consultation. Although home prices have risen, property tax bills have also increased, making it increasingly difficult to manage on a fixed retirement income. Even within Bowie, the assessed values differ between the Old Town area and newly developed regions, leading to varying levels of perceived burden.

In such situations, reverse mortgages are often mentioned as an alternative. This product allows homeowners aged 62 and older to receive funds by using their home equity as collateral, with the most common form being the Home Equity Conversion Mortgage (HECM) insured by the Federal Housing Administration (FHA). Unlike traditional loans that require monthly payments, borrowers can choose to receive funds as a lump sum, monthly payments, or a line of credit.

There is an important point to note here. While funds received from a reverse mortgage can be used to pay property taxes, the responsibility for paying property taxes and insurance premiums remains with the homeowner. In fact, during the application process, a financial assessment is conducted to determine if the homeowner can continue to cover these costs in the future. Failure to keep up with these payments can lead to default.

Looking at Bowie's housing prices, the average home value based on Zillow is $527,321 as of April 30, 2026, which is a 0.2% decrease over the past year. However, for long-term residents, the equity built up over the years can be substantial. The amount available for use from this equity is calculated based on age, interest rates, and home value, and it does not equate to the full equity amount.

The average effective property tax rate in Maryland is around 1.00% (with a median home value of $397,700 resulting in an annual property tax of $3,989, according to propertytaxrates.org). Since there are differences by county, it is essential to check the actual bill for Prince George's County, where Bowie is located, for accuracy.

Reverse mortgages are not the only way to reduce property tax burdens. Several states, including Maryland, have property tax deferral or reduction programs for seniors or low-income retirees. It may be worthwhile to first contact the county tax office to explore these options.

Initial costs should not be underestimated. When adding origination fees, mortgage insurance, and closing costs, the upfront burden is greater than that of a traditional mortgage. However, because of the non-recourse structure, heirs are not required to pay any excess if the home value falls below the loan balance later on. Still, since equity decreases each year, it is important to calculate how much of an asset will be passed on to children.

In Maryland, the population aged 65 and older makes up about 16% of the total, with an increase of 3.35% between 2023 and 2024 (Maryland Matters, reported July 2025). In neighborhoods like Bowie, where older housing stock is prevalent, such consultations are expected to increase in the future.

It is better to plan to use funds received from a reverse mortgage not just for property tax payments but also to consider overall living expenses. The method of receiving a lump sum versus receiving a set amount monthly differs in how it addresses recurring expenses like property taxes.

• Initial costs (origination fees, mortgage insurance, etc.) are higher than those of traditional mortgages
• Homeowners must continue to pay property taxes and insurance premiums, and failure to do so poses a risk of default
• As equity decreases, inherited assets may also diminish
• Mandatory counseling through a HUD-approved counseling agency is required before applying

In neighborhoods like Bowie, where many long-term residents live, there may already be neighbors who have explored reverse mortgages. However, since each individual's home value, existing loan balance, and age differ, it is more accurate to obtain estimates that fit one's own situation rather than relying solely on neighbors' experiences. The terms presented by different counselors may vary slightly, so it is advisable to compare multiple options rather than making a decision based on just one explanation.

HECM requires mandatory counseling through a HUD-approved counseling agency before applying. If the goal is to reduce property tax burdens, it is also worth looking into local government property tax relief programs. In either case, it is important not to rush and to discuss thoroughly with family before making a decision.