Here are several excerpts from an article by Jessica Guerin, an editor at Housingwire, What happens when you take a reverse mortgage, but your spouse does not? The bottom line is that non-borrowing spouses have some protections, but there are still risks.
To qualify for a reverse mortgage, you have to be at least 62 years old. But if you’re old enough and your spouse is not, you can still take the loan by having your partner file as a “non-borrowing spouse.”
If you have a non-borrowing spouse listed in your loan file, you may qualify for less money, as the loan amount on a reverse mortgage is determined by the youngest age of the borrower. But, your spouse will be able to remain in the home should you pass away while the loan is active. Still, there are risks associated when you agree to this arrangement.
Issues with non-borrowing spouses have been a sore spot for the HECM program over the years, leading to rough headlines calling out the program for kicking seniors out of their homes after their spouse passed away.
The Department of Housing and Urban Development has taken steps to curtail the problem, putting measures in place to ensure non-borrowing spouses are protected.
In 2014, it released guidelines allowing “qualified” non-borrowing spouses to remain in the home after the borrower passed, provided they were married at the time of application and at the time of death, and that they keep up with the obligations of the loan. In 2015, if further clarified eligible versus non-eligible non-borrowing spouses.
In 2017, it made additional changes enabling non-borrowing spouses to remain on the title, making it easier for them to prove their right to remain in the home upon the death of their spouse.
But while HUD’s changes have come a long way to increase protections, challenges remain.