Does the VA Offer Reverse Mortgages?

Reverse mortgages can provide homeowners, including veterans, with a way to access the equity in their homes without selling or moving. However, unlike other loan programs offered by the Department of Veterans Affairs (VA), such as VA home loans, the VA does not directly offer reverse mortgages. Here’s what veterans need to know about reverse mortgages and alternative options:

What Are Reverse Mortgages?

Reverse mortgages are loans available to homeowners aged 62 or older that allow them to convert part of their home equity into cash. Unlike traditional mortgages, reverse mortgages do not require monthly mortgage payments. Instead, the loan balance is repaid when the borrower sells the home, moves out, or passes away.

VA-Backed Reverse Mortgages

While the VA does not offer reverse mortgages directly, veterans who qualify for VA home loans may be eligible for a VA-backed reverse mortgage, known as a Home Equity Conversion Mortgage (HECM) for Purchase. This program allows eligible borrowers to purchase a new primary residence using a reverse mortgage.

Alternative Options for Veterans

For veterans interested in accessing their home equity without selling their homes, alternative options to consider include:

• HECM for Purchase: Veterans aged 62 or older may be eligible for an HECM for Purchase to buy a new primary residence using a reverse mortgage.
• Cash-Out Refinance: Veterans with sufficient equity in their homes may qualify for a cash-out refinance, allowing them to refinance their existing mortgage and access cash.
• Home Equity Loan or Line of Credit: Veterans may explore traditional home equity loans or lines of credit to access their home equity.

Conclusion

While the VA does not offer reverse mortgages directly, veterans have alternative options for accessing their home equity, including VA-backed reverse mortgages for home purchases and traditional loan products. Before pursuing any option, veterans should carefully consider their financial situation and consult with a mortgage professional to explore the best solution for their needs.