BARRETT HENRY | THE NOW TEAM

Reverse Mortgage in Florida

Everything you need to know about using a Reverse Mortgage to buy a home in Florida. Expert guidance from Barrett Henry, REALTOR® at REMAX Collective.

How a Reverse Mortgage Works

A reverse mortgage — formally called a Home Equity Conversion Mortgage (HECM) — allows Florida homeowners age 62 and older to convert a portion of their home equity into tax-free cash without making monthly mortgage payments. Instead of you paying the lender each month, the lender pays you (or provides a line of credit), and the loan balance grows over time. The loan is repaid when you sell the home, move out permanently, or pass away. HECMs are insured by the Federal Housing Administration (FHA) and regulated by HUD, which means standardized protections including a non-recourse guarantee: you or your heirs will never owe more than the home is worth, even if the loan balance exceeds the property value.

In Florida, reverse mortgages have unique considerations tied to the state's homestead exemption laws. Your homestead exemption remains intact with a reverse mortgage — you do not lose your property tax savings. However, both spouses must be listed as borrowers (or eligible non-borrowing spouses must meet specific HUD requirements) to ensure the surviving spouse can remain in the home. Florida's strong property value appreciation in markets like Tampa Bay, Sarasota, and the Gulf Coast means many homeowners age 62+ are sitting on substantial equity — the median home value in Hillsborough County exceeds $380,000 in 2026, potentially qualifying for a reverse mortgage payout of $150,000 to $225,000 depending on age and interest rates.

Barrett Henry, Broker Associate at REMAX Collective with 23+ years of real estate experience, has worked with many Tampa Bay homeowners navigating the decision between a reverse mortgage and selling their home. A reverse mortgage is not the right fit for everyone, but for homeowners who want to age in place, eliminate their monthly mortgage payment, or access cash for healthcare, home modifications, or supplemental retirement income, it can be a powerful tool. HUD requires independent counseling before you can apply — this protects you from high-pressure sales tactics. Call Barrett at (813) 733-7907 for an honest conversation about whether a reverse mortgage makes sense for your situation.

Reverse Mortgage Eligibility Requirements

All borrowers must be at least 62 years old — if one spouse is under 62, they can be listed as an eligible non-borrowing spouse (they can stay in the home but their age is not used in the benefit calculation, which reduces the payout amount)
The home must be your primary residence — you must live in the property as your principal home; second homes, vacation properties, and investment properties are not eligible for HECM reverse mortgages
Complete a HUD-approved HECM counseling session before applying — this independent counseling (phone or in-person, typically $125-$175) is mandatory and covers loan terms, alternatives, and financial implications; no lender can waive this requirement
Sufficient home equity: while there is no specific equity percentage requirement, you must have enough equity to pay off any existing mortgage balance from the reverse mortgage proceeds and still receive a meaningful benefit — most borrowers need at least 50% equity
Financial assessment: lenders evaluate your income, credit history, and expenses to ensure you can maintain property taxes, homeowners insurance, and home maintenance — if concerns exist, the lender may require a set-aside (escrow) from your loan proceeds
Property must meet FHA minimum property standards — a home inspection or appraisal may identify required repairs that must be completed before or shortly after closing; common Florida issues include roof condition, HVAC function, and structural integrity
Eligible property types include single-family homes, HUD-approved condominiums, 2-4 unit properties (if borrower occupies one unit), and some manufactured homes built after June 1976 on a permanent foundation
No minimum credit score requirement from HUD, but the financial assessment reviews credit history for patterns of delinquency — recent bankruptcy, foreclosure, or federal debt (tax liens, student loans) may require explanation or resolution

Benefits of a Reverse Mortgage

Eliminate your monthly mortgage payment — the reverse mortgage pays off your existing mortgage, and you make no monthly principal or interest payments for as long as you live in the home as your primary residence

Tax-free proceeds: reverse mortgage payouts are considered loan advances, not income, so they are not subject to federal or state income tax and do not affect your Social Security benefits (though they may affect Medicaid eligibility if not spent within the same month)

Multiple payout options: receive a lump sum at closing, fixed monthly payments (tenure or term), a line of credit you draw from as needed, or any combination — the line of credit option is particularly powerful because the unused balance grows over time at the loan's interest rate

Non-recourse loan protection: you or your heirs will never owe more than the home's fair market value at the time of repayment, even if the loan balance has grown beyond the home's worth — FHA insurance covers the difference

Florida homestead exemption is preserved — your property tax savings through homestead exemption remain intact when you take a reverse mortgage, and your Save Our Homes cap on assessed value increases continues to apply

Heirs retain all options: when the borrower passes away or moves out, heirs can sell the home and keep any equity above the loan balance, refinance into a traditional mortgage to keep the home, or let the lender sell it (and keep any surplus equity); heirs are never personally liable for the debt

HECM for Purchase option: buyers 62+ can use a reverse mortgage to purchase a new home, combining the down payment with a reverse mortgage so they never make monthly payments — ideal for Florida downsizers or relocators

Growing line of credit: if you choose the credit line option, the unused portion grows at the same rate as the loan's interest rate plus the annual MIP rate — a $100,000 credit line could grow to $130,000+ in 5 years without you doing anything

Frequently Asked Questions About Reverse Mortgages in Florida

Do I still own my home with a reverse mortgage?

Yes, you retain full ownership and title to your home. A reverse mortgage is a lien against the property, just like a traditional mortgage — the lender does not own your home. You remain responsible for property taxes, homeowners insurance, HOA fees, and basic maintenance. The loan is repaid when you sell, move out permanently, or pass away.

How much money can I get from a reverse mortgage in Florida?

The amount depends on your age (older borrowers receive more), current interest rates (lower rates mean higher payouts), and your home's appraised value up to the 2026 HECM limit of $1,209,750. A 72-year-old with a $400,000 home and no existing mortgage could potentially access $200,000-$240,000. A HUD-approved counselor and lender can provide an exact calculation based on your specific situation.

What happens to the reverse mortgage when I die?

Your heirs have options. They can sell the home and keep any equity above the loan balance, refinance into a conventional mortgage to keep the property, or deed the home to the lender if the loan balance exceeds the value (with no personal liability). Heirs typically have 6 months to decide, with possible extensions up to 12 months. The estate is never responsible for any shortfall between the loan balance and home value.

Does a reverse mortgage affect my Florida homestead exemption?

No. Your Florida homestead exemption remains fully intact with a reverse mortgage. You continue to receive the up to $50,000 property tax exemption, and your Save Our Homes 3% annual cap on assessed value increases is preserved. The reverse mortgage does not change your homestead status as long as the property remains your primary residence.

Can I use a reverse mortgage to buy a new home in Florida?

Yes, the HECM for Purchase program allows buyers age 62+ to purchase a new primary residence using a reverse mortgage. You make a larger down payment (typically 45-62% of the purchase price, depending on your age) and finance the rest with a reverse mortgage — no monthly mortgage payments from day one. This is popular with Florida downsizers and retirees relocating to Tampa Bay.

What are the costs and fees on a reverse mortgage?

Costs include an origination fee (up to $6,000, based on home value), FHA mortgage insurance premium (2% of the home's appraised value upfront, plus 0.50% annually on the loan balance), third-party closing costs (appraisal, title, recording — typically $2,000-$4,000), and the mandatory counseling fee ($125-$175). Most of these costs can be financed into the loan rather than paid out of pocket.

Insider Tips from Barrett Henry

The growing line of credit is the most underused and most powerful reverse mortgage feature. Even if you do not need cash today, opening a reverse mortgage line of credit at age 62 and letting it grow means you will have a significantly larger pool of funds available at 72 or 75 when you might need it for healthcare, home modifications, or supplemental income. The unused credit line grows regardless of what happens to your home's market value.

If you are considering selling your home to downsize, compare the net proceeds of selling against the HECM for Purchase option. A HECM for Purchase lets you buy a new Florida home — say a maintenance-free condo or villa in a 55+ community — and never make monthly mortgage payments. Many Tampa Bay retirees use this strategy to upgrade their living situation while preserving cash. Call Barrett at (813) 733-7907 to run the numbers both ways.

Make sure both spouses are protected. If one spouse is under 62, they should be listed as an eligible non-borrowing spouse on the reverse mortgage. Without this designation, the younger spouse could be forced to repay the loan or vacate the home if the borrowing spouse passes away or moves to a care facility. HUD rules now protect non-borrowing spouses, but only if properly documented at origination.

Talk to a fee-only financial planner — not a reverse mortgage salesperson — before deciding. A reverse mortgage can be an excellent tool for the right situation, but it is not free money. The loan balance grows over time, reducing the equity available to you or your heirs. Barrett Henry will give you an honest assessment at (813) 733-7907 and can refer you to a fiduciary financial advisor to review the full picture.

Questions About Reverse Mortgages in Florida?

Barrett Henry can connect you with trusted lenders and guide you through every step. Call (813) 733-7907 or fill out the form below.