90 Pages Posted: 19 Mar 2016 Last revised: 6 May 2016
Date Written: March 15, 2016
Equity in a home can serve as an important source of supplemental income in retirement. Reverse mortgages allow seniors to draw down equity without selling their home, and without a monthly mortgage payment. The most widely used reverse mortgage product is offered by Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program.The Aging in Place study is a multi-phase research project being conducted by researchers at The Ohio State University, in partnership with the certified reverse mortgage counseling agency, ClearPoint Credit Counseling Solutions, with funding from The MacArthur Foundation and The U.S. Department of Housing and Urban Development (HUD). Before obtaining a HECM loan, prospective borrowers are required to complete counseling with a certified counseling agency. The study combines administrative data from households who have been counseled for reverse mortgages, HUD loan data for households who borrowed HECM loans, and survey data collected on households three to nine years after receiving counseling for a reverse mortgage. The goal of the study is to provide a better understanding of the relationships between borrowing through a reverse mortgage and financial security, well-being and independence in older age. This report summarizes the results of the Aging in Place study’s survey of counseled households, administered in phases from January, 2014 through July, 2015. The sample population includes seniors who had been counseled for a reverse mortgage by ClearPoint Credit Counseling Solutions from 2006 to 2011, including (1) those who decided not to take out a reverse mortgage; (2) those who took out a reverse mortgage and retained it as of the survey date; (3) and those who took out and then terminated their reverse mortgage as of the survey date. The survey asks people about their experiences with reverse mortgages, as well as general questions on household financial well-being, living conditions and personal health.
Keywords: reverse mortgage, home equity, retirement
JEL Classification: D1, I31, J14
Suggested Citation: Suggested Citation
Moulton, Stephanie and Loibl, Cäzilia and Haurin, Donald R. and Collins, J. Michael and Roll, Stephen and Kondratjeva, Olga and Shi, Wei, Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve Independent Living Summary Report of Survey Results (March 15, 2016). Available at SSRN: https://ssrn.com/abstract=2749368 or http://dx.doi.org/10.2139/ssrn.2749368