Reverse Mortgage Questions, Answered

Yes. You keep the title to your home from the day you close. The lender holds a lien — exactly as with any other mortgage — but you remain the owner with all the rights that come with ownership, including the right to sell or leave it to your heirs.

Read more: Reverse mortgage myths South Dakota families believe

No. A HECM is an FHA-insured loan offered by a private lender — in this case, Fairway Independent Mortgage Corporation. It is not a government benefit or entitlement. Interest and fees accrue over time, and the loan balance grows.

Yes — and this is a built-in consumer protection, not a hurdle. Every HECM borrower must complete an independent session with a HUD-approved counselor before any loan can close. That counselor has no affiliation with the lender. Their job is to make sure you understand the loan terms, costs, and alternatives before making any commitment.

No. A HECM is a non-recourse loan. Neither you nor your heirs will ever owe more than the home's appraised value at the time of sale. FHA insurance covers any shortfall between the loan balance and the sale price.

No. Because a HECM is a non-recourse loan, your heirs are never personally liable for more than the home is worth at sale. When the loan becomes due, heirs can sell the home to repay the balance and keep any remaining equity — or they can pay off the loan and keep the home. They will never receive a surprise bill.

Read more: Reverse mortgage myths South Dakota families believe

No — as long as you meet three obligations: live in the home as your primary residence, keep current on property taxes and homeowners insurance, and maintain the property in reasonable condition. There is no expiration date on the loan tied to your age or how long you have had it.

The loan balance grows over time as interest accrues, which reduces the equity in your home. Whether equity remains at the time of sale depends on your home's value, how long you stay, and interest rates. Because of the non-recourse structure, you and your heirs will never owe more than the home is worth — regardless of how the balance has grown.

Three core requirements apply: at least one borrower must be 62 or older; you must have substantial equity in the home; and the home must be your primary residence. A financial assessment also confirms you can sustain property taxes, insurance, and maintenance over the life of the loan.

There is no minimum credit score or income requirement for a HECM. A financial assessment — not traditional credit underwriting — is used to confirm you can keep up with property taxes, insurance, and upkeep. This is meaningfully different from qualifying for a home equity loan or HELOC.

Compare: Reverse mortgage vs. home equity loan

Three factors determine your loan amount: the age of the youngest borrower (older generally means more), your home's appraised value, and current interest rates. Borrowers in their late 60s to early 70s often qualify for roughly 40–55% of home value, with that percentage increasing with age. Your exact number requires a personalized calculation.

Read more: How much can you get from a reverse mortgage in South Dakota?

Often, yes. The loan is based on the appraised value of your home up to the FHA lending limit. Appreciation across the Sioux Empire and surrounding South Dakota markets has meaningfully increased the equity picture for many long-tenured homeowners — which can translate into more usable equity than they realize.

Reverse mortgage proceeds are generally not considered taxable income. However, individual situations vary — confirm your specific circumstances with a CPA or tax professional before drawing funds.

It depends on your situation. A HELOC may have lower upfront costs, but it requires monthly payments and can be frozen or reduced by the lender. A reverse mortgage has higher upfront costs but no required monthly payment. The right comparison uses your actual numbers.

Compare: Reverse mortgage vs. home equity loan in South Dakota

It depends on your situation. A reverse mortgage tends to fit homeowners who want to age in place, could use additional retirement income or cash flow, and understand it is a loan with an accruing balance. It tends not to fit those planning to move soon or whose primary goal is leaving maximum equity to heirs.

Read more: Is a reverse mortgage right for South Dakota homeowners?

A HECM for Purchase lets homebuyers 62 or older purchase a new primary residence using a reverse mortgage — with no required monthly mortgage payment. The buyer makes a down payment (typically 35–55% of the purchase price) and the HECM covers the rest. It is a strong option for South Dakotans right-sizing or moving closer to family in retirement.

Read more: HECM for Purchase in Sioux Falls, South Dakota

No. Increasingly, a reverse mortgage is used proactively as part of a coordinated retirement income strategy — for Social Security timing, protecting an investment portfolio during market downturns, funding long-term care, and improving tax efficiency. Many homeowners with significant assets use it as a deliberate planning tool, not a last resort.

Read more: How a reverse mortgage fits into a South Dakota retirement plan

Ideally, yes. A reverse mortgage works best as part of a coordinated retirement income strategy alongside a CPA, financial planner, or estate attorney. Jeff Buum is glad to work alongside your existing advisors — and welcomes joint client meetings.