Can I rent out my home if I have a reverse mortgage? Can I lease my home if I want to move out? Can I get a reverse mortgage on rental property?
If your main residence has a reverse mortgage against the title, you can not rent the home out. Reverse mortgages are only allowed to be made on the borrowers main residence. If at any time during the loan period the house ceases to be the main residence of the loan holder, the loan will become due and payable. This is true under any circumstance that relieves the owner from full residence. Depending on the contract, extended stays in nursing homes can also be considered a leave in residence. As a borrower, make sure that you fully understand the occupancy requirements associated with your particular reverse mortgage contract.
Can I lease my home if I want to move out?
No. Leasing or renting is considered an end to the reverse mortgage contract. When you sign an agreement with a reverse mortgage lender, you state that you will remain in full time residence of that home. If, at any time, you are no longer residing in that house, your reverse mortgage will become payable in full.
Can I get a reverse mortgage on rental property?
A reverse mortgage is only allowed on the principal residence of the owner. You can not get a reverse mortgage on rental property, vacation property or commercial property that you own. This program was designed specifically for homeowners who are in need of financial assistance and wish to use the equity in their residence. This rule was enacted to prevent commercial property owners from abusing the reverse mortgage system. Commercial or rental properties would have to be sold at the time of death of the owner and could lead to the unnecessary eveiction of the current tenants.
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