Which of the following borrowers is best suited for a Home Equity Conversion Mortgage (HECM)?

A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is specifically designed for seniors aged 62 and older, allowing them to convert part of their home equity into loan proceeds.

The focus of HECMs is to provide a source of cash flow, often to supplement retirement income, without requiring the homeowner to make monthly mortgage payments. In this context, a 65-year-old borrower who owns their home outright and seeks additional financial resources to support their living expenses aligns perfectly with the purpose of a HECM. This borrower can utilize the equity in their home to gain funds while continuing to live in the property, which effectively addresses their need for income supplementation.

Other options present scenarios where HECMs may not be the most suitable choice. For example, a borrower needing funds for home improvement projects or someone who has recently cashed out retirement savings for a home down payment might benefit more from other financing options. Additionally, while a disabled veteran may have specific financial needs, those needs do not inherently align with the intended use of a HECM, which is primarily for retirement income or related expenditures for seniors.

Overall, the ideal candidate for a HECM is someone who is older, owns their home, and is