The first reverse mortgage was made in 1961 in Portland, Maine. A savings and loan executive named Nelson Haynes created the loan to help a widow, Nellie Young, remain in her home after her husband’s death. That simple idea of allowing seniors to use the equity they had spent a lifetime building became the foundation of today’s reverse mortgage.
Here are a few important milestones in the program’s history:
- 1961 – The first reverse mortgage is created in Maine.
- 1988 – President Ronald Reagan signs legislation creating the FHA-insured Home Equity Conversion Mortgage (HECM) program.
- 1989 – The first FHA-insured HECM loan is funded.
- 1998 – Congress makes the HECM program permanent and requires independent counseling to help protect consumers.
- 2009 – The HECM for Purchase program begins, allowing eligible seniors to buy a new primary residence with a reverse mortgage.
- 2013 – Congress and HUD strengthen the program by limiting how much money can be withdrawn during the first year, helping ensure borrowers have equity available for the future.
Today’s reverse mortgage is one of the most heavily regulated mortgage programs available. Borrowers must receive independent counseling before obtaining the loan, and the program includes numerous consumer protections designed to help seniors make informed decisions.
While reverse mortgages aren’t the right solution for everyone, they can be an excellent financial tool for homeowners age 62 and older who want to remain in their home while accessing a portion of their home’s equity.
Douglas Jones nmls 286668
Certified Reverse Mortgage Specialist
Mortgage Magic
