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Home loans for seniors helped a couple in their mid-70s move closer to their children and grandchildren. They recently purchased a home and got a mortgage. The couple decided on Home Equity Conversion Mortgages (HECM) through FHA.
“They are now living in their dream home, near their family, have increased their retirement nest egg and have no mortgage payments for as long as they live in the home. That is why this 62-and-older couple chose to get a mortgage at this time in their lives,” says Bill Parker, senior loan originator at Wallick & Folk Inc. in Scottsdale, Ariz.
Click to check your home buying eligibility. (Nov 8th, 2026)
Can seniors qualify for home loans?
Senior citizens can get mortgage loans just like everyone else. It all depends on income, credit score, and cash available. Even seniors into their 90s can get mortgages if they qualify financially.
There are varying reasons for wanting a mortgage. Some seniors may want to downsize to a single-story home or a property that requires less upkeep. Others may want to be closer to family.
Some seniors even get mortgages to buy homes for their children who couldn’t qualify for a loan.
No matter the reason, senior citizens are more than able to qualify for a mortgage. According to the Federal Trade Commission (FTC), the Equal Credit Opportunity Act protects elderly people against age discrimination when they seek a home loan or any kind of credit. This federal law also protects borrowers against bias due to race, color, religion, national origin, sex, marital status, or receipt of public assistance.
This means that all seniors are eligible to buy a home if they can qualify.
Click to check your home buying eligibility. (Nov 8th, 2026)
What home loans are available for seniors?
Seniors can choose from a wide range of home loans if they qualify and can prove they have enough regular income. That said, loan applications for retirees often look a bit different.
What loan term is best for seniors?
One thing for seniors to consider is how long a loan term they should get. For some, a 30-year mortgage may be a little long.
At the same time, a 30-year loan may be a suitable option for some based on its lower monthly payments.
The length of the term a senior gets could also depend on requirements that are specific to certain loan types.
Click to check your home buying eligibility. (Nov 8th, 2026)
Home loan program options for seniors
Senior home buyers have all the same loan program options as regular home buyers. Their choice depends on their personal finances. These include how much of a down payment they can afford and the amount they feel comfortable paying each month.
For seniors who can, a conventional loan is likely to be a great option.
Seniors who may have a harder time qualifying for a conventional loan have other home loan program options to help make home ownership possible.
Government home loans for senior citizens
FHA loans
FHA loans are backed by the Federal Housing Administration. They are an accessible option for home buyers who may have a harder time coming up with a down payment.
For borrowers with a credit score of at least 580, it’s possible to get an FHA loan with just 3.5% of the purchase price down. This can be a great option for senior home buyers who are buying a home for the first time.
VA loans
For senior homebuyers who have military experience, a VA loan can be a great option. The Department of Veterans Affairs backs these loans. They offer benefits including relatively low interest rates, no down payment, and no mortgage insurance.
USDA loans
For seniors who live in rural areas, the USDA program offers zero-down payment loans to borrowers whose household income is no more than about 115% of the median income for the area.
Home Equity Conversion Mortgages (HECM)
For senior homebuyers who need another option, there is the Home Equity Conversion Mortgage. It can be a great option for borrowers who don’t meet the income requirements of a regular mortgage. That can happen when people are living on fixed incomes like pensions, retirement income, or Social Security.
Some senior homebuyers may find themselves in the same position as the couple Parker worked with. They already owned a home worth $550,000 and had no mortgage left on it. They netted about $525,000 from the sale of the house after paying a real estate commission and closing costs. The home they wished to purchase was listed at $605,000.
If not for the HECM, they would have had to use up all of their net proceeds plus another $100,000 of their retirement savings to pay the rest of the purchase price plus closing costs, Parker said.
Instead, they chose a HECM for about $355,000 on the new home, and they only needed $275,000 of the sale proceeds. This allowed them to leave their retirement savings intact. They also added the remaining $250,000 of the proceeds from the profits of selling their house into their retirement account.
Their numbers depend on their ages and the interest rates at the time. When rates are higher, a HECM covers a smaller share of the purchase price. Ask a lender for a quote based on current rates.
HECM eligibility and counseling
HECM is a popular loan program option for qualifying senior citizens. You can participate in FHA’s HECM program if you are 62 or older, own and live in your home, and have paid off most or all your mortgage or paid it down. You must first complete counseling with a HUD-approved HECM counselor. The lender will also review your income, credit, and assets to make sure you can keep paying property taxes, insurance, and upkeep.
This is FHA’s reverse mortgage program, the only such program insured by the federal government. It allows people to purchase another primary residence if they have extra cash on hand. They must have enough to pay the difference between the HECM proceeds and the sale price plus closing costs.
Home equity loans for seniors
You could use a cash-out refinance but that resets the interest rate and the loan term on your mortgage. If you’ve got a mortgage you’re happy with then refinancing might not be a suitable option.
For seniors looking to access their home equity, second mortgage options include home equity loans and lines of credit.
- Home equity loan: This kind of loan will give borrowers a lump sum of cash upfront that they’ll then pay back at a fixed rate over a set period of time.
- Home equity line of credit (HELOC): Unlike a home equity loan, this type of loan operates as a revolving line of credit, up to a set limit.
A home equity loan is secured by your home. That means your home could be on the line if you fail to repay. Given that, it’s important not to take a second mortgage on lightly and to make sure that you’re not using it for anything frivolous.
While it could be worthwhile to make necessary home improvements, it’s probably not the right type of loan for a new car purchase. It could be a good choice if you’re looking to pay off high-interest credit card debt. It may not be a good choice if you’re simply going to run up the credit card balances again.
Mortgages are becoming more accessible to seniors
Fannie Mae’s guidelines now let seniors use the balances in their 401(k)s, IRAs and other retirement accounts as qualifying income, even if they are not taking money out. This applies to purchases and limited cash-out refinances of a primary residence or second home. The maximum loan-to-value ratio is 70%, or 80% if the borrower is at least 62 years old.
This policy change allows seniors to use the balances in these accounts to supplement their earnings on paper without ever taking out any money. Before this change, lenders turned down some seniors for loans because their debt-to-income didn’t match high standards. This happened even though they had great equity in their homes, some savings, and good credit scores.
Click to check your home buying eligibility. (Nov 8th, 2026)
Get advice before choosing a loan
Sometimes the elderly become prey to predatory mortgage lenders. Under the Truth in Lending Act (TILA), lenders have to disclose the cost and terms of a loan along with a lot of other information. The Real Estate Settlement Procedures Act (RESPA) prohibits the payments of unearned fees and kickbacks.
According to the National Consumer Law Center, equity-rich and cash-poor elderly homeowners are a big target for unscrupulous mortgage lenders. Before signing anything, talk with a trusted accountant or attorney about the terms and costs of any potential home purchase and new mortgage.
