Let's follow the case of a retired couple who have lived in the same house in Anandale for over 30 years. This area has seen steady increases in home prices over the years, leading to significant equity accumulation. The issue is that the couple wants to pass the house on to their two children in full. They need funds for living expenses after retirement but do not want to reduce their inheritance assets, making the consideration of a reverse mortgage crucial.

First, they checked the local market prices. The median value of homes in the Anandale area is approximately $763,000. Given that this part of Northern Virginia, which falls under Fairfax County, has higher home prices than the national average, it means there is substantial equity available, but also a larger asset size to maintain.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against the equity in their home through a lump sum, monthly payments, or a line of credit. Instead of making monthly payments, the loan is repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence. A representative product is the HECM, which is insured by the Federal Housing Administration.

Continuing with this couple's case, they first had to pass a financial assessment. The eligibility requirements include being at least 62 years old, the home must be their primary residence, and they must be able to continue paying property taxes and insurance. Since Anandale is known for having a significant Korean community, finding a HUD-approved counseling agency that offers consultations in Korean can be helpful. However, it is essential to verify that the counseling agency is actually HUD-approved, and proceeding without confirming this should be avoided.

The advantages were clear. They could secure funds for living expenses without monthly repayments, and due to the non-recourse structure, even if the home value falls below the loan balance later, the heirs are not required to pay the difference thanks to FHA insurance.

However, for this couple concerned about inheritance, the costs and reduction of equity were more important. When adding origination fees, mortgage insurance premiums, and closing costs, the initial costs are higher than a traditional mortgage, and over time, the loan balance increases, reducing the equity left for their children.

The property tax rate in Fairfax County for 2025 is $1.1225 per $100 of assessed value, which is about 1.12 percent. While the absolute tax rate is lower than in some areas of Texas, the high home prices mean that the actual burden is not insignificant, and even after obtaining a reverse mortgage, these taxes and insurance premiums remain the owner's responsibility. Falling behind could lead to default risks.

Additionally, the couple checked the loan limits. The amount they can receive from a reverse mortgage varies based on the home appraisal and the owner's age, with older borrowers generally able to access larger amounts. However, the exact amount is confirmed only after appraisal and lender review.

To create a more thorough inheritance plan, the couple also consulted a tax advisor. They were advised that even with a reverse mortgage, the remaining equity is still subject to inheritance procedures, so it is wise to align the overall picture with wills or trust arrangements. They were also informed that the estimated amounts provided during the consultation might differ from the final confirmed amounts. Since the actual loan amount can vary based on appraisal and interest rate conditions, it is advisable to compare explanations from multiple counseling agencies.

In Virginia, the population aged 65 and older is 17.8 percent, close to the national average of 18 percent. This suggests that there are likely many other retired families in the area, like this couple, who are contemplating inheritance. HECM requires mandatory counseling with a HUD-approved agency before applying, and this couple decided to consult with their children after the counseling session to make a final decision. Since their decision came after several family meetings without rushing, they would like to recommend this step-by-step approach to other families facing similar concerns. This article is not investment or legal advice, and consulting with professionals before making contracts is advised.