Reverse Mortgages in Washington 2026: Pros, Cons & How They Work

What Is a Reverse Mortgage?

A reverse mortgage is a loan that lets homeowners aged 62 and older borrow against the equity in their home without selling it or making monthly mortgage payments. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA). Instead of you paying the lender each month, the lender pays you — as a lump sum, monthly installments, a line of credit, or a combination. The loan is repaid when you sell the home, move out permanently, or pass away.

In my 20+ years advising Seattle-area homeowners, I have found reverse mortgages to be one of the most misunderstood products in lending. They are neither a scam nor a magic solution — they are a tool that fits some retirement plans very well and others poorly. This guide lays out exactly how they work so you can decide for yourself.

How a Reverse Mortgage Works

Three things happen with a HECM:

• You borrow against your equity. The amount you can access depends on the age of the youngest borrower, your home's appraised value, and current interest rates. Older borrowers with more equity can access more.
• You make no required monthly mortgage payment. The loan balance — principal plus accrued interest and fees — grows over time rather than shrinking. You remain responsible for property taxes, homeowner's insurance, and maintenance.
• The loan is repaid when you leave the home. When you sell, move out for more than 12 consecutive months, or pass away, the loan becomes due. Your heirs can repay the balance and keep the home, or sell it and keep any remaining equity.

Because a HECM is non-recourse, you and your heirs will never owe more than the home is worth when the loan is repaid — even if the balance has grown beyond the home's value. FHA insurance covers the difference.

Who Qualifies in Washington?

To qualify for a reverse mortgage in Washington, you generally need to meet these requirements:

• At least one borrower is 62 or older (the younger borrower's age sets the available amount).
• The home is your primary residence.
• You have substantial equity — typically 50 percent or more.
• The property is an eligible type: single-family home, HUD-approved condo, FHA-approved manufactured home, or a two-to-four-unit property where you live in one unit.
• You pass a financial assessment showing you can keep up with taxes, insurance, and upkeep.
• You complete a required counseling session with an independent HUD-approved counselor before closing.

The Pros

• No monthly mortgage payment. This frees up cash flow for living expenses, healthcare, or simply peace of mind in retirement.
• You keep your home. You retain title and ownership — the lender holds a lien, just like a traditional mortgage.
• Funds are tax-free. Reverse mortgage proceeds are loan advances, not income, so they are generally not taxed (confirm with your tax professional).
• Flexible access. Take a lump sum, monthly payments, or a line of credit that can actually grow over time.
• Built-in protection. FHA insurance and the non-recourse feature protect you and your heirs from owing more than the home's value.

The Cons

• Your equity decreases over time. As the balance grows, the equity left for you or your heirs shrinks.
• Ongoing obligations remain. If you fail to pay property taxes or insurance, or stop living in the home, the loan can become due — and you could risk foreclosure.
• Upfront and ongoing costs. HECMs carry mortgage insurance premiums, origination fees, and closing costs that can be higher than a traditional loan.
• It can complicate inheritance. If leaving the home free and clear to heirs is a priority, a reverse mortgage may not be the right fit.

Is a Reverse Mortgage a Good Idea for You?

A reverse mortgage tends to make sense when you are 62 or older, have significant equity, plan to stay in your home for the long term, and want to eliminate a monthly payment or supplement retirement income. It is often used strategically — establishing a growing line of credit as a safety net, delaying Social Security, or covering healthcare costs.

It is usually not the right choice if you expect to move within a few years, if your heirs are counting on inheriting the home outright, or if keeping up with taxes and insurance would be a stretch. The honest answer depends entirely on your goals.

Talk It Through With a Local Advisor

Reverse mortgages reward careful planning. If you are a Washington homeowner weighing your options, I am happy to walk through the numbers with you — no pressure, no obligation. We will look at how much equity you could access, what it costs, and whether a HECM actually fits your retirement plan or whether another option serves you better.