Reverse Mortgages: Background and Issues

Reverse Mortgages: Background and Issues

Reverse Mortgages: Background and Issues
Bruce E. Foote
Analyst in Housing Policy
February 22, 2010
Congressional Research Service
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www.crs.gov
RL33843
CRS Report for Congress
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repared for Members and Committees of Congress

Reverse Mortgages: Background and Issues

Summary
Since the 1970s, parties have sought to create mortgage instruments that would enable elderly
homeowners to obtain loans to convert their equity into income, while providing that no
repayments would be due for a specified period or, ideally, for the lifetime of the borrower. These
instruments have been referred to as reverse mortgages, reverse annuity mortgages, and home
equity conversion loans.
Reverse mortgages are the opposite of traditional mortgages in the sense that the borrower
receives payments from the lender instead of making such payments to the lender. Reverse
mortgages are designed to enable elderly homeowners to remain in their homes while using the
equity in their homes as a form of income.
In general, reverse mortgages may take one of two forms: term or tenure. Under a term reverse
mortgage, the borrower is provided with income for a specified period. Under a tenure reverse
mortgage, the borrower is provided with income for as long as he or she continues to occupy the
property.
For borrowers, the most risky reverse mortgage is the term reverse mortgage. Borrowers have
been reluctant to enter such mortgages because at the end of the loan term the borrower would
likely have to sell the home and move.
For lenders, the most risky reverse mortgage is the tenure reverse mortgage. Lenders have been
reluctant to originate such mortgages because the borrower is guaranteed lifetime income and
lifetime occupancy of the home. This is risky because the mortgage debt grows over time, and the
debt could exceed the value of the home if the borrower lives longer than his or her life
expectancy. The use of tenure reverse mortgages has grown in recent years due to the availability
of an Federal Housing Administration (FHA)-insured reverse mortgage. Under the FHA program,
the risk of the borrower living too long is shifted to the federal government.
Under prior law, FHA-insured reverse mortgages were subject to the FHA mortgage limit for the
area in which a property is located. The Housing and Economic Recovery Act of 2008, P.L. 110-
289, established a mortgage limit equal to the conforming loan limit for the Federal Home Loan
Mortgage Corporation (Freddie Mac).
Present law limits the aggregate number of FHA-insured reverse mortgages to 275,000 loans, and
that limit has been exceeded. Notwithstanding the limit in present law, the Consolidated
Appropriations Act, 2010, P.L. 111-117, provided that FHA may continue to insure HECMs
through September 30, 2010.
This report will be updated as deemed necessary in response to changes in law or regulation.

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Reverse Mortgages: Background and Issues

Contents
Introduction ................................................................................................................................ 1
The Evolution of Reverse Mortgages .......................................................................................... 2
Sale-Leaseback Transactions ................................................................................................. 2
Reverse Annuity Mortgage.................................................................................................... 3
Reverse Mortgage ................................................................................................................. 5
Current Reverse Mortgage Plans ................................................................................................. 6
The Home Equity Conversion Mortgage Program (HECM)................................................... 7
The Home Keeper Mortgage ................................................................................................. 8
The Cash Account Plan ......................................................................................................... 9
Senior Equity Reverse Mortgage ......................................................................................... 10
Choosing Among the Plans ....................................................................................................... 10
Using Reverse Mortgages for Long-Term Care.......................................................................... 12
Funding Long-Term Care Directly ...................................................................................... 12
Funding Long-Term Care Insurance .................................................................................... 13
Issues for the Elderly................................................................................................................. 14
Downsizing......................................................................................................................... 14
Selling and Renting............................................................................................................. 14
Finding Tenants................................................................................................................... 14
Reverse Mortgage ............................................................................................................... 14
Issues for Congress ................................................................................................................... 16
Potential Federal Liability ................................................................................................... 16
HECM Loan Limit .............................................................................................................. 16
Long-Term Care Insurance.................................................................................................. 18
Number of HECM Loans .................................................................................................... 18
Aging in Place .................................................................................................................... 18
References ................................................................................................................................ 19

Tables
Table 1. Comparison of Monthly Reverse Annuity Mortgage Benefits ......................................... 4
Table 2. Payment Options Under a $100,000 Term Reverse Mortgage ......................................... 6
Table 3. Payment Options Under Reverse Mortgage Programs by Age of Youngest
Homeowner ........................................................................................................................... 11
Table 4. Comparison of Reverse Mortgage Benefits to a Homeowner in Albany, NY ................. 11
Table 5. Comparison of Reverse Mortgage Benefits to a Homeowner in Glendale, CA ............. 12
Table 6. HECM Loans by Fiscal Year ........................................................................................ 17

Contacts
Author Contact Information ...................................................................................................... 20
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Reverse Mortgages: Background and Issues

Introduction
According to the American Housing Survey (AHS), there are about 18.3 million elderly
homeowners (age 65 or older) and the median value of their homes is $168,654.1 About 12.5
million of the elderly homeowners (more than 68%) have no mortgage debt.2 For many of the
elderly homeowners, the equity in their homes represents their largest asset.
Many elderly homeowners find that although inflation has increased the value of their homes, it
has also eroded the purchasing power of their fixed incomes. They find it increasingly difficult to
maintain their homes while also paying for needed food, medical, and other expenses. Because of
their low incomes, many may be unable to qualify for loans to pay for unexpected expenses.
“House rich and cash poor” is the phrase often used to describe their dilemma. One option is to
sell the home and move to rental housing or purchase a lower-cost home. For a variety of reasons,
however, many older Americans prefer to remain in the homes in which they may have spent
most of their working years.
Since the 1970s, academics and housing advocates have sought to create mortgage instruments
that would enable elderly homeowners to obtain loans to convert their equity into income, while
providing that no repayments would be due for a specified period or, ideally, for the lifetime of
the borrower. These instruments have been referred to as reverse mortgages, reverse annuity
mortgages, and home equity conversion loans.
Generally, when a borrower obtains a mortgage, a lender advances a lump-sum payment to or on
behalf of the borrower, and the borrower becomes committed to making a stream of monthly
payments to repay the loan. With the reverse mortgage, the lender becomes committed to making
a stream of payments to the borrower, and such payments are repaid to the lender in a lump sum
at some future date. Thus, reverse mortgages are the opposite of traditional mortgages in that the
borrower receives payments from the lender instead of making such payments to the lender.
Reverse mortgages are designed to enable elderly homeowners to remain in their homes while
using the equity in their homes as a form of income.
Although reverse mortgages are a small part of the total mortgage market, their use has increased
substantially in recent years. This report discusses the evolution and history of reverse mortgages,
compares reverse mortgage products currently available, discusses the potential use of reverse
mortgages as a way to finance long-term care, and raises a number of issues for policymakers and
the elderly (aged 65 or older).

1 U.S. Census Bureau, American Housing Survey for the United States: 2007, Current Housing Reports, Series
H150/07. Washington, DC, September 2008, p. 474.
2 U.S. Census Bureau, American Housing Survey for the United States: 2007, Current Housing Reports, Series
H150/07, Washington, DC, September 2008, p. 478.
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The Evolution of Reverse Mortgages
Sale-Leaseback Transactions
Under a sale-leaseback transaction a property is sold to a buyer who simultaneously leases the
property to the seller. Often, sale-leaseback transactions are used by businesses that seek to raise
working capital by selling and leasing back some property that is used in the trade or business.
The technique enables firms to raise capital and avoid high borrowing costs. Capital that was
formerly frozen in real estate assets can be used to generate a higher rate of return in the business
itself. If the business obtained a mortgage against the property, the mortgage would cover only 75
to 80% of the market value of the property. Through the sale-leaseback transaction, the business
can obtain cash for 100% of the value of the property (less transaction costs) and still maintain
use and possession of the property.
In the 1970s, some advocates suggested sale-leaseback transactions as a way for elderly
homeowners to convert the equity in their homes into a source of income. Under this plan, the
elderly homeowner would sell the home and lease it back from the new owner. The seller could
retain the right of occupancy for life or for a fixed number of years. In either case, the seller
would become a renter of the home that he or she formerly owned.
The burden of property taxes, home insurance, and repair and maintenance costs would rest with
the new owner. It is argued that these costs make it difficult for elderly homeowners to remain in
their homes or cause them to make trade-offs between making home repairs and taking care of
necessities such as food and health care. Such trade-offs may result in the elderly having owner-
occupied but substandard property. Under a sale-leaseback plan, the owner/investor would be
paying the operating costs of the property and be eligible for the associated tax write-offs.
Proponents hold that the elderly would remain in well-maintained homes without the financial
burden of such maintenance.
The sale-leaseback plan is a complicated form of equity conversion because of the number of
variables that must be negotiated between the buyer and seller. The parties must negotiate the
sales price, downpayment, loan term, and lease agreement. The items are interrelated and may
affect the net benefit of the transaction to the elderly homeowner.
A few programs were initiated. Under the so-called “Grannie Mae” program, a company would
arrange for the children or grandchildren to purchase and leaseback the home of the elderly
person.3 Under another plan, the Fouratt Senior Citizen Equity Plan, the leaseback payments took
two forms: a promissory note (mortgage) and a deferred annuity.4 The promissory note would
provide for monthly payments to the seller over a term equal to the greater of the seller’s life
expectancy or 10 years. When the payments from the promissory note ended, the annuity would
make the same payments for the lifetime of the seller.

3 “Q and A on Grannie Mae,” Home Equity News, National Center for Home Equity Conversion, No. 8, June 1984, p. 3
4 Sloan, Katrinka Smith. “New Developments in Home Equity Conversion.” The Real Estate Finance Journal, vol. 3,
issue 4, March 1988, p 44.
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Only three Grannie Mae loans were made. There was interest in the Fouratt program but no loans
were ever made. Sale-leaseback transactions are still being suggested as an option for elderly
homeowners. Data are not available on whether homeowners are choosing that option.
Reverse Annuity Mortgage
The reverse annuity mortgage is another concept that was suggested in the 1970s by advocates of
reverse mortgages. Under a reverse annuity mortgage (RAM), equity in the home is used as
security for a loan. An annuity is purchased with the loan proceeds and the borrower receives
monthly annuity income, less mortgage interest. The borrower pays only interest on the loan—
repayment of the principal is deferred until the death of the owner, the sale of the property, or
some prescribed date.
Table 1 shows the net annuity that would be available under a RAM to a female homeowner for a
range of ages and interest rates. The age shown is the borrower’s age when the loan was taken. It
is assumed that a borrower obtains a $200,000 interest-only mortgage on the property and uses
the proceeds to purchase an annuity. That means that the loan balance will always be $200,000.
Upon the death of the borrower, the sale of the property, or some prescribed date, the borrower or
the borrower’s heirs would owe the lender $200,000. For a 55-year-old borrower the annuity
would be $1,062 monthly. If interest rates are 5%, the lender would deduct $833 from the annuity
and forward the borrower a net annuity of $229. If interest rates are 12%, the interest payment
would be greater than the annuity payments so the borrower would owe the lender $938 (a net
annuity of $-938). This would defeat the purpose of entering into a RAM.
The table shows that rising interest rates are a risk for homeowners and that the interest rate risk
is greater for younger borrowers. For 55 and 60-year-old borrowers, the net annuity would
become negative when interest rates are at 7% or higher. The net annuity would become negative
at 8% for 65-year-olds, 9% for 70-year-olds, 10% for 75-year-olds, and 12% for 80-year olds. But
RAMs may become a bad financial choice long before the net annuity becomes negative. For
example, the net annuity becomes negative at 9% for a 70-year old, but would it make economic
sense for a 70-year-old to mortgage the home and only receive a net income of $380 monthly
when interest rates are 6%?
For the homeowner, another risk of the RAM is that the borrower may die too soon. Suppose a
75-year old female obtained a RAM and died after receiving 12 payments. The estate would owe
$200,000, even though the owner only received $19,332 in gross benefits. Of course, the owner
could have purchased an annuity with a 10 years certain option or cash refund option. The 10
years certain option provides that if the annuitant lives less than 10 years after the plan is issued,
the payments would continue to the beneficiary’s estate until the 10 year period is completed. The
cash refund option provides that if the total payments to the annuitant are less than the original
premium (in this example, $200,000) the beneficiary would receive the balance in a lump sum.
These options reduce the monthly annuity payments and thereby reduce the financial viability of
the RAM.
Under RAMs, the risks for lenders are that the owner may live too long (mortality risk). The
purchase of the annuity shifts the mortality risk to an insurance company.
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Table 1. Comparison of Monthly Reverse Annuity Mortgage Benefits

Age of Homeowner

55
60
65
70
75
80
Gross Annuitya
$1,062 $1,114 $1,243 $1,380 $1,611 $1,937
Less Interest:b
at 5%
833 833 833 833 833 833
Net Annuity
229
281 410 547 778
1,104
at 6%
1,000 1,000 1,000 1,000 1,000 1,000
Net Annuity
62 114 243 380 611 937
at 7%
1,167 1,167 1,167 1,167
1,167 1,167
Net Annuity
-105 -53 76 213 444 770
at 8%
1,333 1,333 1,333 1,333 1,333 1,333
Net Annuity
-271 -219 -90 47 278 604
at 9%
1,500 1,500 1,500 1,500 1,500 1,500
Net Annuity
-438 -386 -257 -120 111 437
at 10%
1,667 1,667 1,667 1,667 1,667 1,667
Net Annuity
-605 -553 -424 -287 -56 270
at 11%
1,833 1,833 1,833 1,833 1,833 1,833
Net Annuity
-771 -719 -590 -453 -222 104
at 12%
2,000 2,000 2,000 2,000 2,000 2,000
Net Annuity
-938 -886 -757 -620 -389 -63
Source: Calculations by CRS using annuities generated at http://www.immediateannuities.com.
a. Monthly payment to a female on a $200,000 immediate annuity.
b. Monthly interest due on a $200,000 interest-only mortgage.

Though the concept appeared promising, CRS is aware of only one program that offered RAMs,
though they were not marketed as such. In the 1990s, Homefirst, a subsidiary of Transamerica
Corporation, offered a reverse mortgage plan in many parts of the country. Under the so-called
“Lifetime” plan the borrower would receive monthly loan advances for a specified number of
years. A deferred annuity was purchased from Metropolitan Life Insurance Company on behalf of
the borrower, and it would begin lifetime monthly annuity payments once the borrower received
the last loan advance. The borrower would receive lifetime income regardless of whether they
continued to occupy the property.
By the late 1990s, there were several complaints regarding the reverse mortgages from Homefirst.
An extreme example is illustrated by the case of a New York woman. She took out a reverse
mortgage and received loan advances until she died after receiving 32 monthly payments. When
her home was sold a few months later, Financial Freedom (Homefirst) demanded more than
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$765,000 as repayment under the terms of the reverse mortgage. The monthly payments she had
received during the life of the loan totaled about $58,000.5
As a result of this case and similar cases, three class action lawsuits were filed against
Transamerica HomeFirst, Inc., Transamerica Corporation, Metropolitan Life Insurance Company,
and Financial Freedom Senior Funding Corporation. The cases were combined and settled before
a single judge in the Superior Court of California in San Mateo County under Judicial Council
Coordination Proceeding No. 4061.
The above example illustrates the risks to borrowers and lenders of reverse annuity mortgages.
Financial Freedom no longer offers the “Lifetime Plan.” Instead, it offers the “Cash Account
Plan” as a proprietary reverse mortgage product, and that plan is discussed in a section below.
Reverse Mortgage
In general, reverse mortgages may take one of two forms—term or tenure. Under term reverse
mortgages the borrower is provided with income for a specified period. Under tenure reverse
mortgage the borrower is provided with income for as long as they continue to occupy the
property.
From the lender’s perspective, reverse mortgages are deferred-payment loans. The lender makes a
stream of payments (or a lump-sum payment) to the homeowner and expects repayment at some
future date. The repayment is predicated upon the sale of the home at some price which exceeds
the debt that has accumulated against the home.
The largest risk the lender faces is the risk that over time the outstanding debt may grow to be
greater than the property value. This may be referred to as collateral risk. Collateral risk is partly
determined by the type of reverse mortgage. The least risky reverse mortgage is the term reverse
mortgage under which payments stop after a specified number of years. Payments to the
homeowner are calculated so that the loan reaches a target balance at the predetermined period.
That target balance is less than 100% of the property value when the loan was originated. As long
as the property has not depreciated during the period, the lender is assured that sale of the
property will provide sufficient funds to repay the loan.
For lenders, the most risky reverse mortgage is the tenure reverse mortgage because the borrower
is guaranteed lifetime income and lifetime occupancy of the home. In this case, the collateral risk
may be significant if the age of entry is too low, if property appreciation rates are overestimated,
or if occupant survival rates are underestimated.
In general, prior to the 1990s lenders were only willing to make term reverse mortgages. The
payment options under these term reverse mortgages are relatively easy to calculate—all that is
needed is the interest rate, the term of the loan, and the end-of-term loan balance. With these
factors it is a simple matter to calculate the monthly payment that would cause the loan balance to
grow to the specified amount over the specified term. As shown in Table 2 for example, the
monthly payment to a homeowner seeking a $100,000 reverse mortgage at a 6.5% interest rate
would be $594 for a 10-year term, $943 for a seven-year term, $1,415 for a five-year term, and

5 Kenneth R. Harney, “Settlement Shows How Costly Reverse Mortgages Can Be,” Washington Post, February , 2003,
p. H3.
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$2,523 for a three-year term. Table 2 also shows the maximum cash advance that will grow to a
loan balance of $100,000 over the given terms.
The age of the homeowner is not a factor in term reverse mortgages, homeowners would receive
the same income regardless of age. If the owner lives longer than the loan term, the home would
have to be sold to pay off the debt.
This feature, however, made term reverse mortgages unattractive to homeowners who faced the
prospect of having to sell their homes at a specified date, and to lenders who faced the prospect of
risking their reputations by forcing such sales. For these reasons there have been few takers for
term reverse mortgages.
Table 2. Payment Options Under a $100,000 Term Reverse Mortgage
Loan Term
Monthly Payments ($)
Cash Advance ($)
10 years
594
52,296
7 years
943
63,523
5 years
1,415
72,316
3 years
2,523
82,327
Source: Calculations by CRS.
Note: This example assumes that the interest rate is fixed at 6.5% and that there are no transaction costs.
Recent Reverse Mortgage Plans
Over time three major reverse mortgage products became available to consumers in the U.S. They
are the Home Equity Conversion Mortgage Program (HECM), the Home Keeper reverse
mortgage, and the Cash Account Plan. At present, a relatively new reverse mortgage, the “Senior
Equity Reverse Mortgage,” is only available in Arizona, California, Delaware, the District of
Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Texas, and Virginia.
All of the plans provide the borrower with lifetime occupancy of the home—“tenure” reverse
mortgages. The availability of tenure reverse mortgages is likely the cause of the dramatic growth
of reverse mortgages in the past few years.
These tenure reverse mortgages also provide the borrower with flexibility on how the income
from the mortgage is received. A borrower may receive monthly payments as long as the property
is occupied by the borrower. The borrower may receive a line of credit which grows at some
specified annual rate and upon which the borrower may make draws as needed. The borrower
may choose to receive a large up-front cash advance. Or the borrower may choose any
combination of the above, such as a smaller cash advance, a line of credit, and monthly income.
The following sections discuss and compare these reverse mortgage products.
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The Home Equity Conversion Mortgage Program (HECM)
The Housing and Community Development Act of 1987 (P.L. 100-242) authorized the Home
Equity Conversion Mortgage Program (HECM) in the Department of Housing and Urban
Development (HUD) as a demonstration program. It was the first nationwide reverse mortgage
program which offered the possibility of lifetime occupancy to elderly homeowners.6 As noted
above, such mortgages are referred to as tenure reverse mortgages. The borrowers must be elderly
homeowners who own and occupy their homes.7 The interest rate on the loan may be fixed or
adjustable.8 The homeowner and the lender may agree to share in any future appreciation in the
value of the property.9 The program has been made permanent and the law was amended to
permit its use for one-to four-family residences if the owner occupies one of the units. 10
The borrower can choose from five payment plans:
• Tenure—equal monthly payments as long as at least one borrower lives and
continues to occupy the property as a principal residence.
• Term—equal monthly payments for a fixed period of months selected by the
borrower.
• Line of Credit—installments at times and in amount of borrower’s choosing until
the line of credit is exhausted.
• Modified Tenure—combination of line of credit with monthly payments for as
long as the borrower remains in the home.
• Modified Term—combination of line of credit with monthly payments for a fixed
period of months selected by the borrower.
Prior law provided that the HECM loan may not exceed the Federal Housing Administration
(FHA) mortgage limit for the area in which the property is located. The Housing and Economic
Recovery Act of 2008, P.L. 110-289, establishes a national HECM limit equal to the conforming
loan limit for the Federal Home Loan Mortgage Corporation (Freddie Mac). The mortgage must
be a first mortgage, which, in essence, implies that any previous mortgage must be fully repaid
either prior to the HECM or from the initial proceeds of the HECM. Prior to obtaining a loan,
borrowers must be provided with counseling by third parties who will explain the financial
implications of entering into home equity conversion mortgages as well as explain the options,
other than home equity conversion mortgages, that may be available to elderly homeowners. To
prevent displacement of the elderly homeowners, HECMs must include terms that give the
homeowner the option of deferring repayment of the loan until the death of the homeowner, the
voluntary sale of the home, or the occurrence of some other events as prescribed by HUD
regulations. The borrowers may prepay the loans without penalty.

6 The mortgages were not initially available in Texas because state law prohibited reverse mortgages. Texas law has
been subsequently amended to permit reverse mortgages.
7 If the property has multiple owners, the youngest owner must be at least 62 years of age.
8 Virtually all of the HECM loans are sold to the Federal National Mortgage Association (Fannie Mae). Since lenders
generally make HECM loans with the intention of selling them to Fannie Mae, and since Fannie Mae only buys HECM
loans that have adjustable rates, all HECM loans are made with adjustable interest rates.
9 Fannie Mae will not buy HECM loans that feature equity sharing, so none are made with this feature.
10 Section 593 of P.L. 105-276.
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Borrowers are required to purchase insurance from FHA. The insurance serves two purposes: (1)
it protects lenders from suffering losses if the final loan balance exceeds the proceeds from the
sale of a home, and (2) it continues monthly payments to the homeowner if the lender defaults on
the loan. At loan origination borrowers are required to pay an up-front mortgage insurance
premium (MIP) of 2% of the maximum mortgage amount. In addition, borrowers pay an annual
insurance premium of 0.5% of the loan balance. Borrowers do not directly pay the insurance
premiums. Instead, lenders make the payments to FHA on behalf of the borrowers and the cost of
the insurance is added to the borrower’s loan balance.
A lender may choose either the assignment option or the coinsurance option when originating the
loan. Under the assignment option, HUD will collect all the MIP and the lender may assign the
loan to HUD at the point that the loan balance equals the maximum HUD claim amount for the
area. Under the coinsurance option, the lender may keep part of the MIP and forfeit the right to
assign the case to HUD.
To date, data indicate that all lenders have chosen the assignment option. By choosing this option,
effectively, lenders are shifting the collateral risk to HUD.
The American Homeownership and Economic Opportunity Act of 2000 (P.L. 106-569) amended
the National Housing Act (12 USC 1715z-20) to waive the up-front insurance premium provided
that the HECM proceeds are used to pay for long-term care insurance. The regulations to
implement this change have never been finalized. This provision was eliminated by Section 2122
of P.L. 110-289.
When the home is eventually sold, HUD will pay the lender the difference between the loan
balance and sales price if the sales price is the lesser of the two. The claim paid to the lender may
not exceed the lesser of (1) the appraised value of the property when the loan was originated, or
(2) the maximum HUD-insured loan for the area.
The Federal National Mortgage Association (Fannie Mae) has been purchasing the home equity
conversion mortgages originated under the program.
The Home Keeper Mortgage
Since November 1996, Fannie Mae had also been offering its own reverse mortgage product: the
“Home Keeper Mortgage.” This was the only conventional reverse mortgage that was available
on a nationwide basis. Private lenders have developed proprietary reverse mortgage products but
they are generally only available in a few states.
In September 2008, Fannie Mae announced that, after December 31, 2008, Fannie Mae will no
longer purchase Home Keeper mortgages.11 Fannie Mae noted that it no longer sees a significant
role for the Home Keeper mortgage in light of the expansion of HECMs.

11 Announcement to Terminate Home Keeper Reverse Mortgages, Reverse Mortgage Lender Letter 2008-3, Fannie
Mae, September 3, 2008.
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The Cash Account Plan
Financial Freedom Senior Funding Corp., of Irvine, CA, offers the “Cash Account Plan” as a
proprietary reverse mortgage product. The Cash Account Plan is available to seniors 62 years or
older who own homes with a minimum value of $75,000. It differs from the two products above
in that it does not offer the borrowers an option of getting monthly payments. It provides an open-
end line of credit that is available for as long as the borrower occupies the home. The borrower
can draw on the line of credit in full or part at any time; the minimum draw is $500. The unused
portion of the line of credit grows by 5% annually.12 Eligible home types include owner-occupied
single-family detached, manufactured, condominium, Planned Unit Development units, or one-to
four-unit residences if one unit is owner-occupied. Borrowers are required to obtain counseling
from an independent counselor prior to obtaining the loans.
A monthly servicing fee is automatically added to the loan.13 The interest rate charged to the
borrower is equal to the current six-month London Interbank Offered Rate (LIBOR) plus 5
percentage points. The rate is adjusted semi-annually, but the interest rate may never rise more
than 6 percentage points above the initial rate.
The Cash Account Plan is available in two forms: the Standard Option and the Zero Point Option.
Under the Standard Option, a borrower pays a loan origination fee that is equal to 2% on the first
$500,000 of loan balance, 1.5% on the next $500,000, and 1% on the balance in excess of $1
million.
Under the Zero Point Option, the borrower pays no loan origination fee. Closing costs, including
third party costs and excluding state and local taxes, will not exceed $3,500. At closing the
borrower is required to take a draw on the line of credit, and the minimum draw at closing is 75%
of the line of credit. Subsequent draws have a minimum of $500. Full prepayment is permitted
and, while there are no prepayment penalties, partial prepayment on the initial draw is not
permitted for the first five years. The Zero Point Option is generally marketed to elderly
homeowners with homes valued at $450,000 or more.
On June 18, 2008, Financial Freedom announced that it was suspending the Cash Account Plan.14
This action was taken largely because of liquidity problems of IndyMac, the parent company of
Financial Freedom.
The Cash Account Plan was available in the District of Columbia and 24 states: Arizona,
California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon,
Pennsylvania, Utah, Vermont, Virginia, Washington, and Wyoming.

12 For example, if a borrower had a $150,000 line of credit and had not drawn on it during the year, the next year the
line of credit would be $157,500.
13 No servicing fee is permitted in Illinois and Maryland.
14 For details, see http://reversemortgagedaily.com/2008/06/18/financial-freedom-cash-account-discontinued/.
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Senior Equity Reverse Mortgage
In late 2006, Reverse Mortgage of America, a subsidiary of Seattle Mortgage, introduced “The
Lifestyle Plan.” It was the first new reverse mortgage product to be introduced in nearly a decade.
In 2007, Bank of America purchased the reverse mortgage products of Seattle Mortgage. The
mortgages are being marketed as the “Senior Equity Reverse Mortgage,” and at present are only
available in Arizona, California, Delaware, the District of Columbia, Georgia, Maryland, North
Carolina, South Carolina, Texas, and Virginia.
Like the Cash Account Plan, the Senior Equity Reverse Mortgage allows homeowners age 62 and
older to use some of the equity in their homes while continuing to live there. It is designed for
owners of high-value homes, up to $10 million. Borrowers may choose to receive their funds in a
single lump sum, in regular monthly installments, as a line of credit, or any combination of these
options. So, unlike the Cash Account Plan, the Senior Equity Reverse Mortgage offers a monthly
payment to borrowers.
The interest rate on the Senior Equity Reverse Mortgage is the six-month LIBOR Index, plus 2.95
percentage points. The interest rate may vary, but may not exceed 18%. Borrowers pay a loan
origination fee of 1% of the home value but not more than $10,000. Borrowers also pay a
monthly servicing fee of $25.
The proceeds from a Senior Equity Reverse Mortgage may be used to purchase a primary
residence or a second home. The borrower would be responsible for a down payment equal to the
difference between the value of the new home and the amount of funds received from the Senior
Equity Reverse Mortgage.
Choosing Among the Plans
Table 3 compares the income that may be received under the three major plans for the same
valued home. The table shows the monthly income that would be available if the borrower chose
only to receive monthly payments, and the largest line of credit that would be available at loan
origination if the borrower chose to only have a line of credit. The HECM plan pays the largest
monthly payments and has the largest available lines of credit.
Table 4 compares the benefits available under the reverse mortgage programs for a 70-year-old
homeowner in Albany, NY. At all home values, the funds available from the HECM exceed those
available from the other plans.
Table 5 has been prepared using the Los Angeles area as a base. As with Table 4, it shows that
the funds available from the HECM exceed those available from the other plans.
Thus, it is not surprising that reverse mortgages made under HECM account for about 90% of the
reverse mortgages made nationwide. The HECM offers better value to most borrowers.
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Table 3. Payment Options Under Reverse Mortgage Programs
by Age of Youngest Homeowner

HECM
Home Keepera
Cash Accounta
Monthly
Line of
Monthly
Line of
Monthly
Line of
Age
Income
Credit
Income
Credit
Income
Credit
62 $602
$108,092
$204
$24,244
N/A $54,650
65 644
113,033
254
32,336
N/A 60,478
70 727
121,331
417
57,675
N/A 71,570
75 839
130,334
633
73,171
N/A 83,602
80 999
139,679
801
90,035
N/A 88,678
85 1,254
149,015
1,053
108,145 N/A 93,378
90 1,749
158,070
1,202
119,864 N/A 98,078
Source: Calculated by CRS using the Reverse Mortgage Calculator on Financial Freedom’s website.
Note: Estimates are based on a $200,000 home in Denver, CO. It is assumed that the homeowner had no
outstanding loans against the property.
a. These estimates were run before Financial Freedom suspended the program on June 18, 2008 and before
Fannie Mae announced the termination of the Home Keeper reverse mortgage.

Table 4. Comparison of Reverse Mortgage Benefits to a Homeowner in Albany, NY
HECM
Home Keeper
Cash Account
Home
Monthly
Line of
Monthly
Line of
Monthly
Line of
Value
Income
Credit
Incomea
Credita
Income
Creditb
$200,000 $603 $93,461 $413 $57,089 N/A $75,965
250,000 770 119,392 528 73,082 N/A 96,281
300,000 937 145,324 648 89,074 N/A 116,597
350,000 1,105 171,255 760 105,066 N/A 136,550
400,000 1,272 197,187 875 121,059 N/A 156,457
450,000 1,442 223,619 915 126,491 N/A 176,364
500,000 1,613 250,050 915 126,491 N/A 196,121
550,000 1,783 276,501 915 126,491 N/A 216,023
Source: Calculated by CRS using Reverse Mortgage Calculator on Financial Freedom’s website.
Note: Estimates are based on a loan to a 70-year old in Albany, NY. It is assumed that the homeowner had no
outstanding loans against the property.
a. The Home Keeper loan limit was $417,000 when these estimates were run, and that determined the
maximum payments available under the Home Keeper program.
b. These estimates were run before Financial Freedom suspended the program on June 18, 2008, and before
Fannie Mae announced the termination of the Home Keeper reverse mortgage.
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Table 5. Comparison of Reverse Mortgage Benefits to a Homeowner
in Glendale, CA
HECM
Home Keeper
Cash Account
Home
Monthly
Line of
Monthly
Line of
Monthly
Line of
Value
Income
Credit
Incomea
Credita
Income
Creditb
$200,000 $609 $94,481 $417 $57,629 N/A $71,478
250,000 777 120,588 533 73,686 N/A 90,608
300,000 945 146,595 649 89,742 N/A 109,738
350,000 1,114 172,671 765 105,799 N/A
128,696
400,000 1,282 198,748 881 121,856 N/A
147,462
450,000 1,453 225,324 920 127,310 N/A
166,227
500,000 1,629 251,901 920 127,310 N/A
184,992
550,000 1,796 278,477 920 127,310 N/A
203,752
Source: Calculated by CRS using the Reverse Mortgage Calculator on Financial Freedom’s website.
Note: Estimates are based on a loan to a 70-year old in Glendale, CA. It is assumed that the homeowner had no
outstanding loans against the property.
a. The Home Keeper loan limit was $417,000 when these estimates were run, and that determined the
maximum payments available under the Home Keeper program.
b. These estimates were run before Financial Freedom suspended the program on June 18, 2008, and before
Fannie Mae announced the termination of the Home Keeper reverse mortgage.
Using Reverse Mortgages for Long-Term Care
As indicated previously, the AHS estimates that more than 12.5 million homeowners age 65 older,
have homes that are free of mortgage debt. With the growth in the public cost of long-term care
for the elderly, there has been research and discussion of ways that elderly homeowners may use
reverse mortgages to tap this home equity and fund their own long-term care.
Funding Long-Term Care Directly
One option is for the homeowners to use reverse mortgages to fund long-term care directly.
Primarily this would involve paying for home modifications and in-home care that would permit
them to “age-in-place.” Under its “Use Your Home to Stay at Home” initiative, the National
Council for the Aging (NCOA) is encouraging the use of reverse mortgages to fund long-term
care. Of the nearly 28 million American households age 62 and older, NCOA has found that about
13.2 million (48%) are good candidates for a reverse mortgage. According to NCOA, an
estimated $953 billion could be available from reverse mortgages for immediate long-term care
needs and to promote aging in place.15

15 Stucki, Barbara R. Use Your Home to Stay at Home: Expanding the Use of Reverse Mortgages for Long-Term Care:
A Blueprint for Action, The National Council on the Aging, January 2005, p 9.
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That $953 billion figure, however, appears to have been calculated by assuming that the
homeowners would, on average, be eligible for about $72,200 in reverse mortgage loans and then
multiplying by the 13.2 million potential reverse mortgage candidates. In effect, that is assuming
a 100% participation rate when in fact a much smaller percent of homeowners participate. The
percent of elderly homeowners with reverse mortgages has been increasing over the years, and
Reverse Mortgage Insight estimates that, as of November 2009, for the first time more than 2% of
elderly homeowners have reverse mortgages.16
By using reverse mortgages, some of the elderly would be able to fund their long-term care
expenses for a number of years, and thereby delay potential entry into the Medicaid program. It is
debatable, however, whether and how much savings this approach would provide for the
Medicaid program.
The Medicaid program has the ultimate claim on the home equity of program participants. If
participants fund their care through reverse mortgages, they may use up most or all of their
equity, so there may be little or none left to be claimed by Medicaid. There may be cases where
the net cost to the Medicaid program would be less if the participants had entered the Medicaid
program earlier instead of consuming their equity through reverse mortgages.
Funding Long-Term Care Insurance
Using the proceeds from reverse mortgages to pay for long-term care insurance (LTCI) is another
option for elderly homeowners.
The demographics of reverse mortgages and long-term care insurance do not match for either
consumers or the industry. Long-term care insurers want young consumers. Reverse mortgage
lenders want old consumers. For consumers, LTCI is best taken at an older age when the benefits
are greater, but the premiums are more expensive. For insurers, the major risk is that the
purchasers will get sick too soon and need long-term care before they have paid enough
premiums into the insurance fund. For reverse mortgage lenders, the major risk is that the
borrower will live too long and accumulate debt against the property which exceeds the property
value. The different risks result in different outcomes for consumers with the same profile. For
example, insurers are reluctant to provide insurance to borrowers with certain health problems,
because of the likelihood that the borrowers may need to use the insurance. Lenders, however,
will make reverse mortgages to such borrowers, because there is less likelihood that the
borrowers will occupy the property too long.
The cost of the insurance is another issue. In recent years, insurers have raised the insurance
premiums on current customers. This suggests that a homeowner who used a reverse mortgage to
purchase long-term care insurance could face the risk that the cost of the policy could increase at
some later date. That would not be a problem if the homeowner could afford the increased cost.
But if the increase were unaffordable, the borrower would have to drop the insurance. If this
occurred, it might be possible that the borrower would still have some paid-up benefits, but the
level of coverage would be less than the borrower had planned when initially purchasing the
policy.

16 Reverse Mortgage Daily, “Reverse Mortgage Industry Reaches 2% Market Penetration,” press release, January 27,
2010, http://reversemortgagedaily.com/2010/01/27/reverse-mortgage-industry-reaches-2-market-penetration/?
utm_source=Reverse+Mortgage+Daily&utm_medium=email&utm_campaign=cd7758bd23-RMD+Email+RSS.
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Issues for the Elderly
Though there has been growth in use of reverse mortgages in recent years, it is still a relatively
little used option for elderly homeowners. Many elderly homeowners do not understand the
program and are reluctant to participate. After spending many years paying for their homes,
elderly owners may not want to mortgage the property again. There are several options to be
considered.17
Downsizing
One option is to sell the home and purchase something smaller. Present law permits a seller to
exclude from taxation up to $250,000 ($500,000 for a married couple) of the gain from sale of a
home. The home must have been used as the principal residence for two out of five years before
the sale. Funds not used for the new purchase could be used for investment and as a source of
cash to meet future needs.
Selling and Renting
Instead of purchasing another property the homeowner could consider renting an apartment,
perhaps in a complex designated for those 55 and older. The proceeds from the sale of the home
could be saved and invested and used for income when needed.
Finding Tenants
Rather than sell the home, the homeowner could consider renting part of the home to students,
young couples, other retirees. The rental income would help with ongoing expenses. In addition
to the economic benefit, a rental might also provide some companionship to the owner.
Reverse Mortgage
The homeowner might consider a reverse mortgage. As mentioned above, a reverse mortgage
enables an elderly homeowner to use the equity in the home to receive monthly income, a line of
credit, or some combination of the two. Repayments are delayed until the home is no longer
occupied as a principal residence. Then the borrower or the heirs must repay the loan. If the home
is sold and the sales price exceeds the loan balance, the borrower or the heirs keep any proceeds
that remain.18 If the sales price is less than the loan balance, then the lender suffers the loss. The
funds received from the reverse mortgage are tax free because the funds are considered as loan
proceeds instead of income. The payments from reverse mortgages do not affect the income or
eligibility from Social Security or Medicare. But homeowners who receive Supplemental Security

17 This list is illustrative rather than exhaustive.
18 Selling the home is not a requirement. The borrower or the heirs have the option of keeping the home and obtaining a
loan or using other funds to repay the reverse mortgage debt.
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Income (SSI) or Medicaid19 might have these benefits reduced if the recipients do not spend their
entire sum received under the reverse mortgage each month.
When considering a reverse mortgage, several questions should be addressed:
• Participants may be provided with lifetime occupancy, but will borrowers
generate sufficient income to meet future health care needs?
• Will they obtain equity conversion loans when they are too “young” and, as a
result, have limited resources from which to draw when they are older and more
frail and sick?
• Will the “young” elderly spend the extra income on travel and luxury consumer
items?
• Should home equity conversion mechanisms be limited as last resort options for
elderly homeowners?
• Will some of the home equity be conserved?
• How would an equity conversion loan affect the homeowner’s estate planning?
• Does the homeowner have other assets? How large is the home equity relative to
the other assets?
• Will the homeowner have any survivors?
• What is the financial position of the heirs apparent?
• Are the children of the elderly homeowner relatively well-off and with no need to
inherit the “family home” or the funds that would result from the sale of that
home?
• Alternatively, would the ultimate sale of the home result in significant
improvement in the financial position of the heirs?
• How healthy is the homeowner? What has been the individual’s health history?
• Are large medical expenses pending? At any given age, a healthy borrower will
have a longer life expectancy than a borrower in poor health.
• What has been the history of property appreciation in the area?
The above questions are interrelated. Their answers should help determine whether an individual
should consider a reverse mortgage, what type of loan to consider, and at what age a reverse
mortgage should be considered.

19 Medi-Cal in California.
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Issues for Congress
Potential Federal Liability
As revealed in Table 6, there has been dramatic growth in the use of HECMs over the past few
years. More than 114,300 loans were made in FY2009 compared to little more than 157 in 1990.
As of September 30, 2009, the outstanding balance of active HECM loans was $60 billion and the
potential HUD liability for these loans was $102.5 billion.20
As noted previously, one of the greatest risks for lenders is that the borrower will live too long
and that the loan balance will exceed the home value—collateral risk. Under the HECM program
this risk falls to HUD because the lender can assign the loan to HUD in those cases. The
collateral risk then becomes a potential liability for the FHA insurance fund.
When HUD accepts the assignment of HECM loans, HUD becomes responsible for future
borrower advances or fixed payments until termination of the loan due to the death of the
homeowner, the refinancing of the loan, or the sale of the home. At the end of FY2009, the value
of HECM loans assigned to HUD has grown to $772 million.
HECMs had previously been an obligation of the FHA General Insurance (GI) fund but Section
2118 of the Housing and Economic Recovery Act of 2008 (HERA), P.L. 110-289, made HECMs
an obligation of the FHA Mutual Mortgage Insurance fund for all loans obligated in FY2009 and
beyond. The HECM activity from FY1992 to FY2008 remains with the GI fund, and the liability
for that activity increased from $1.5 billion at the end of FY2008 to $4.8 billion at the end of
FY2009.21 The increase in liability is primarily due to the drop in projections of home price
appreciation. Less appreciation in home prices would result in lower recoveries from the sale of
homes assigned to HUD in the future.
This will be less of a problem for HECMs made in FY2010 and beyond. Given the interest rate
and the age of the prospective borrower, HUD calculates factors which, when multiplied by the
appraised value of the property, give the so-called “principal limit” or maximum HECM that
initially may be obtained by the borrower. In September 2009, HUD announced new principle
limit factors which are 10% lower than the factors used in the past.22 It will mean that prospective
HECM borrowers will be eligible for smaller loans than were otherwise available, and HUD’s
liability will decrease accordingly.
HECM Loan Limit
Some proponents of the HECM program have long suggested that the law should be amended to
provide a national HECM mortgage limit instead of having the limit be subject to the area FHA

20 U.S. Department of Housing and Urban Development, Federal Housing Administration Annual Management Report
Fiscal Year 2009, p. 56.
21 U.S. Department of Housing and Urban Development, Federal Housing Administration, Annual Management Report
Fiscal Year 2009, p. 64.
22 U.S. Department of Housing and Urban Development, Home Equity Conversion Mortgage (HECM)- Principal Limit
Factors, Mortgagee Letter 2009-34, Washington, DC, September 23, 2009.
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limit. The Housing and Economic Recovery Act of 2008 (HERA), P.L. 110-289, established a
HECM mortgage limit equal to the conforming loan limit for Freddie Mac. HERA also provided
that, effective January 1, 2009, Freddie Mac will have a general limit and a high-cost limit. The
general limit is $417,000. In areas where 115% of median home price exceeds $417,000, the
Freddie Mac limit will be the lesser of (1) 115% of the median home price or (2) 150% of the
general limit (150% of $417,000 = $625,500). The general limit may be changed on January 1 of
each year on the basis of changes in a home price index maintained by the newly created Federal
Housing Finance Agency. The nationwide HECM limit is set at the Freddie Mac general limit of
$417,000.
The American Recovery and Reinvestment Act of 2009, P.L. 111-5, increased the HECM loan
limit to $625,500 for calendar year 2009. The Continuing Appropriations Act, 2010 (Division B
of P.L. 111-88), provides a $625,500 national HECM limit during calendar year 2010.
Table 6. HECM Loans by Fiscal Year
Fiscal
Number of
Percent Change
Year
HECM Loans
(%)
1990 157

1991 389
148
1992 1,019 162
1993 1,964 93
1994 3,365 71
1995 4,165 24
1996 3,596 -14
1997 5,208 45
1998 7,896 52
1999 7,982 1
2000 6,640a -17
2001 7,781 17
2002 13,049 68
2003 18,097b 39
2004 37,829 109
2005 43,131 14
2006 76,351 77
2007 107,558
41
2008 111,661
4
2009 114,316
2
Source: Data from HUD. Year-to-year percentage change calculated by CRS.
a. HECMs could not be made for part of FY2000 (July to early October 2000) because FHA insurance
authority had been exhausted temporarily.
b. HUD ran out of insurance authority and could not insure HECMs during the last two weeks of September
2003.
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Long-Term Care Insurance
As noted above, prior law provided that a borrower could waive the up-front insurance premium
for HECMs, provided that the HECM proceeds were used to pay for long-term care insurance.23
The law was very restrictive in that it required that all the proceeds of the HECM (after paying off
any existing debt on the property) must be used exclusively for long-term care insurance. In
exchange for savings on the insurance premium (which would be $4,000 on a $200,000 home),
the homeowner would be giving up the option of using future HECM funds to pay for future
home repairs, unexpected health costs, or increases in daily living expenses.
This feature made the proposal risky and unattractive to elderly homeowners. This provision has
been removed from the law by P.L. 110-289.
Number of HECM Loans
The HECM program was begun as a demonstration program which authorized only 2,500 loans
to be made under the program (50 per state).24 The program has been made permanent and the
limit on the aggregate number of HECMs that may be insured has been amended several times. It
was raised to 150,000 by P.L. 106-569, to 250,000 by P.L. 109-13, and to 275,000 by P.L. 109-
289.
The number of HECM loans now exceeds the 275,000 limit, and technically FHA can no longer
insure such loans. Notwithstanding the limit in present law, however, the Consolidated
Appropriations Act, 2010, P.L. 111-117, provides that FHA may continue to insure HECMs
through September 30, 2010.
Aging in Place
Stephen Golant, a University of Florida professor and former consultant to the Commission on
Affordable Housing and Health Facility Needs for Seniors in the 21st Century, suggests that the
explosive growth of reverse mortgages may backfire for both elderly homeowners and the
nation’s cities.25 He suggests that society should not romanticize the notion of older people aging
in place in their homes and be blind to the downside.
According to Golant, the downside is that reverse mortgages encourage the elderly to remain in
older housing that may be unsafe because of physical deficiencies. Holders of reverse mortgages
are disproportionately poor, they often are in their 70s and 80s, and more likely to live alone.
More than half occupy dwellings that are at least 40 years old, which means they are more likely
to live in houses with physical deficiencies. They often do not make improvements in their homes
that could help them avoid accidents. Golant suggests that we are doing a disservice to elderly
homeowners by encouraging them to remain in such homes. Instead, the homes could be sold to
younger home buyers who are more likely to make improvements to the homes which would

23 12 U.S.C. 1715z-20(l)
24 12 U.S.C. 1715z-20(g)
25 Stephan M. Golant. Why Urban Mayors Should Dislike Reverse Mortgages. Paper delivered at the 57th Annual
Scientific Meeting of the Gerontological Society of America, Washington, DC, November 20, 2004.
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contribute to revitalization of neighborhoods. Golant suggests that, although the elderly may
prefer to remain in their own homes, many would be better off in places appropriate for their
frailties and close to the support services they may need.
References
Ahlstrom, Alexis A, and Anne Tumlinson and Jeanne Lambrew. Primer: Linking Reverse
Mortgages and Long-Term Care Insurance. The Brookings Institution. The George Washington
University.
Case, Bradford and Ann B. Schnare. “Preliminary Evaluation of the HECM Reverse Mortgage
Program.” Journal of the American Real Estate and Urban Economics Association; Summer
1994.
Cutler, Neal E. “Homeownership and Retirement Planning: Financial Worries and Reverse
Mortgages.” Journal of Financial Services Professionals, March 2003.
Davodoff, Thomas and Gerd Welke. Selection and Moral Hazard in the Reverse Mortgage
Market. Hass School of Business, University of California at Berkeley, October 21, 2004.
Eschtruth, Andrew D., and Wie Sun and Anthony Webb. Will Reverse Mortgages Save Baby
Boomers? Boston College, Center for Retirement Research, Issue in Brief, No. 54. September
2006.
Gibler, Karen Martin and Joseph Rabianski, “Elderly Interest in Home Equity Conversion,”
Housing Policy Debate. Vol. 4, Issue 4, 1993.
Golant, Stephan. Housing America’s Elderly: Many Possibilities/Few Choices. Sage, 1992.
——Why Urban Mayors Should Dislike Reverse Mortgages. Paper delivered at the 57th Annual
Scientific Meeting of the Gerontological Society of America, Washington, DC, November 20,
2004.
Holt, Michael A., “House Rich but Cash Poor.” The CPA Journal. Pp. 70-74, February 1994.
Kelly, Tom. New Reverse Mortgage Formula: How to Convert Home Equity into Tax-Free
Income. John Wiley & Sons, 2005.
Klein, Linda S. and C.F. Sirmans. “Financial Innovation and the Development of Reverse
Mortgage Programs.” Benefits Quarterly, First Quarter 1993.
Merlis, Mark. Home Equity Conversion Mortgages and Long-Term Care. Health Policy Institute,
Long-Term Care Financing Project, Georgetown University, March 2005.
Quinn, Jane Bryant. “Mortgage Smarts,” Newsweek, October 23, 2006.
Sloan, Katrinka Smith. “New Developments in Home Equity Conversion.” The Real Estate
Finance Journal. Vol. 3, Issue 4, March 1988.
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Stucki, Barbara R. Use Your Home to Stay at Home: Expanding the Use of Reverse Mortgages for
Long-Term Care: A Blueprint for Action, The National Council on the Aging, January 2005.
Symanoski, Edward J. Jr. “Risk and the Home Equity Conversion Mortgage.” Journal of the
American Real Estate and Urban Economics Association; Summer 1994.
U.S. Bureau of the Census. Current Population Reports. pp. 70-88. Net Worth and Asset
Ownership of Households: 1998 and 2000. May 2003.
U.S. Department of Health and Human Services, National Center for Health Statistics. National
Vital Statistics Reports, United States Life Tables, 2003, Vol. 54, No 14, April 2006.
U.S. Department of Housing and Urban Development, Home Equity Conversion Mortgages:
Long Term Care Insurance; Proposed Rule, 69 F.R. 70344. December 3, 2004.

Author Contact Information

Bruce E. Foote

Analyst in Housing Policy
bfoote@crs.loc.gov, 7-7805

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