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Report Acceptance Date: May 2000 (158 pages)

Posted Date: May 01, 2000



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HUD's report to the Congress, concludes that the use of HUD-insured reverse mortgages could be increased if overall loan costs continue to decline, FHA loan limits are raised and the public's awareness of the reverse mortgage program was increased.

The HUD report also found that:

  • The median age of those using HUD reverse mortgages tends to be older (75) than the average elderly American homeowner (72).
  • Homeowners getting reverse mortgages are more likely to be single female households (56.3 percent) than the average elderly American homeowners (27.6 percent).
  • Homeowners getting reverse mortgages are slightly more likely to be African American (9.2 percent) than the average elderly American homeowner (7.8 percent).
  • The homes of reverse mortgage holders are more valuable ($107,000) than the homes of the average elderly American homeowner ($87,000).
  • The properties with reverse mortgages are older (41 years) than the average elderly American homeowner's home (38 years). However, the average cost of needed repairs is lower - $666 compared with $836 - as is the square-footage of the homes - 1,327 square feet compared with 1,700 square feet.
  • Among homeowners with outstanding balances or liens, those with reverse mortgages have a higher equity share (85.7 percent) than average American elderly homeowners (69 percent).
  • HUD's reverse mortgages seem to be used more in the West and Northeast regions of the country, with the greatest market penetration in the states of Utah, Colorado and Rhode Island and the District of Columbia.
  • Reverse mortgages are increasingly popular, with the share of all reverse mortgages in central cities rising from 35.2 percent in 1995 to 41.3 percent in 1999.



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