Recently, a client who has lived in the same house in Centerville for nearly 30 years came to my office. They inquired about the reverse mortgage application process, and the first thing I explained was not the product terms, but the mandatory counseling with a HUD-approved counseling agency. This is a procedure that must be completed before applying. It is important to clarify that without this counseling, the loan application cannot even begin. I also informed them that the counseling agency would review not only the product structure but also other alternatives.

A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds by using their home equity as collateral. Unlike a traditional mortgage, which requires monthly payments, reverse mortgages provide funds in the form of a lump sum, monthly payments, a line of credit, or a combination of these. The loan principal and interest are repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence. Among these, the HECM (Home Equity Conversion Mortgage), which is insured by the Federal Housing Administration (FHA), is the only type of reverse mortgage guaranteed by the U.S. federal government and is the most widely used.

Looking at the real estate prices in Fairfax County, where Centerville is located, as of March 2026, the median home sale price in Centerville is around $617,205 (according to Houzeo data). For households that have lived in their homes for a long time, this means they have accumulated significant equity. The larger the equity, the greater the loan limit available through a reverse mortgage, so households that have lived there longer have more options to consider. However, the real estate tax rate for Fairfax County in the 2026 fiscal year is $1.1225 per $100, or about 1.12 percent, which is not low even within Virginia (according to County Tax Tools data). Even after obtaining a reverse mortgage, the owner must continue to pay property taxes and homeowners insurance, so cashing out equity does not eliminate this burden.

The eligibility requirements are as follows:

• The homeowner must be at least 62 years old.
• The home must be the owner's primary residence.
• If there is an existing mortgage balance, it must be at a level that can be paid off with the reverse mortgage loan.
• The homeowner must pass a financial assessment to ensure they can continue to pay taxes and insurance.

If these requirements are met, the biggest advantage of this product is that it can secure cash flow for living expenses or medical costs without monthly repayment obligations. Additionally, because it is a non-recourse structure, even if the home value falls below the loan balance in the future, thanks to FHA insurance, heirs are not obligated to repay the difference.

On the other hand, there are clear points to consider. When adding the origination fee and mortgage insurance (initially around 2 percent, then about 0.5 percent annually), along with closing costs, the initial costs are generally higher than those of a traditional mortgage. As time goes on, the loan balance increases and home equity decreases, so it is important to calculate that the assets that can be passed on to children may decrease accordingly. Additionally, the homeowner is responsible for maintaining the property throughout the loan period, and neglecting the home's condition can affect the contract terms. Most importantly, failing to continue paying property taxes or insurance can lead to default and the risk of losing the home, which should not be taken lightly.

As of 2024, the percentage of the population aged 65 and older in Virginia is 17.6 percent (according to America's Health Rankings data), and the trend of households considering asset utilization after retirement is increasing. This means that solicitations and exaggerated advertisements related to reverse mortgages targeting the elderly are also on the rise. It is particularly important to be cautious of situations where immediate signatures are requested at free seminar sessions or where pressure is applied to make a decision quickly. Counseling with a HUD-approved counselor is not a formal procedure but a process to objectively assess whether it fits one's situation. Please take your time and discuss thoroughly with your family before making a decision. This article is not investment or legal advice, and it is recommended to consult a professional before applying.