Explore by category
Can you get a reverse mortgage with bad credit?
In this article:
- How do reverse mortgages work?
- Is there a minimum credit score requirement for reverse mortgages?
- Understanding reverse mortgage eligibility requirements
- Is there a minimum credit requirement for a HECM reverse mortgage?
- What disqualifies you from a reverse mortgage?
- Can I get a reverse mortgage if I have outstanding federal debt?
- Can I take steps to improve my finances to get approved for a reverse mortgage?
- Exploring your home equity options
- Frequently asked questions about reverse mortgages
Quick Answer: Yes, you may still be eligible for a reverse mortgage with bad credit. Most reverse mortgage lenders do not require a minimum credit score. However, they still review your finances to confirm you will be able to keep up with property taxes, homeowners insurance, and home maintenance.
Key Points
Reverse mortgage lenders review your credit history and overall finances as part of a financial assessment, even though most loan options do not require a minimum credit score.
Taking steps to improve your financial profile—such as paying down delinquent higher-interest debt—may help strengthen your reverse mortgage application.
Borrowers with credit challenges may need a Life Expectancy Set-Aside (LESA) to cover property taxes and insurance.
Worried that bad credit could prevent you from getting a reverse mortgage? Many homeowners assume they need excellent credit to access their home equity—but that’s not always the case.
According to consumer credit reporting agency Experian, a credit score below 670 is classified as fair or poor. While a score in this range may raise questions during the application process, it does not automatically prevent you from being eligible for a reverse mortgage.
In this article, we explain how credit may affect reverse mortgage eligibility and what lenders review during the financial assessment, so you can better understand whether it may be a good fit for your situation.
How do reverse mortgages work?
If you are worried about credit scores and reverse mortgages, you likely have a decent understanding of how they work. Here’s a quick refresher just in case:
A reverse mortgage is a loan that allows you to access home equity without requiring additional monthly mortgage payments. It may allow eligible seniors to access funds for home repairs, travel, education costs for a loved one, or greater financial flexibility in retirement.
→To learn more, visit our guide: What is a reverse mortgage and how does it work?
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Is there a minimum credit score requirement for reverse mortgages?
No, there is no minimum credit score requirement for a home equity conversion mortgage (HECM) or most proprietary reverse mortgages.
Instead of relying on a specific credit score, lenders conduct a financial assessment to review your overall financial situation. This review considers factors such as income, payment history, existing debt (including credit card debt, auto loans, or personal loans), and your ability to keep up with property-related obligations like property taxes, homeowners insurance, and home maintenance.
For general reference, credit scores are commonly grouped into the following ranges, per Experian:
| Credit score | Category |
| 800-850 | Exceptional |
| 740-799 | Very good |
| 670-739 | Good |
| 580–669 | Fair |
| 579 and below | Poor |
However, severe credit issues, such as delinquent federal debt or recent bankruptcies or foreclosures, may lead to denial.
Borrowers with lower credit scores may still be eligible because approval depends on the overall financial assessment rather than a credit score alone. The Consumer Financial Protection Bureau (CFPB) explains how credit scores are calculated in their credit scoring guide.
Understanding reverse mortgage eligibility requirements
While credit history is one factor lenders review, reverse mortgage eligibility also depends on several other requirements. Lenders evaluate these factors during the financial assessment before approving a loan. (The U.S. Department of Housing and Urban Development (HUD) provides additional information about how financial assessments are used in the HECM program.1)
To be eligible for a reverse mortgage, borrowers typically must meet the following requirements at a minimum:
- Complete mandatory counseling: Before applying for a HECM, borrowers must meet with a HUD-approved counselor to review the loan terms and available alternatives.1
- Own the home and have sufficient equity: Borrowers must hold title to the home and have enough equity to be eligible for a reverse mortgage.
- Meet the age requirement: For HECM loans, borrowers must generally be at least 62 years old.
- Keep up with ongoing housing expenses: Borrowers must continue paying property taxes and homeowners insurance, and keep the home in good condition.
For homeowners seeking a reverse mortgage with bad credit or limited income, the lender may require a Life Expectancy Set-Aside (LESA).
A LESA reserves a portion of the reverse mortgage proceeds to cover future property taxes and homeowners insurance, helping reduce the risk of default.
→ For a more detailed explanation, see our guide to reverse mortgage eligibility requirements.
Is there a minimum credit requirement for a HECM reverse mortgage?
No, there is not a minimum credit requirement for any reverse mortgage, including a HECM.
A HECM reverse mortgage is unique because it is insured by the Federal Housing Administration (FHA) and has a maximum claim amount of $1,249,125 in 2026. This means lenders calculate your available loan amount based on a home value up to that limit.1
Unlike traditional mortgages, approval focuses less on a borrower’s income and more on their ability to meet ongoing housing obligations. Standard HECM eligibility requirements include:
- You must be at least 62 years old
- The home must be your primary residence
- You must have sufficient home equity in the property
- You must complete counseling with a counselor approved by HUD¹
- You must continue to meet property obligations, including property taxes, homeowners insurance, and home maintenance
For borrowers looking into a reverse mortgage with bad credit, this approach may make a difference. Lenders still review credit history, but they focus primarily on whether borrowers are able to meet ongoing obligations and maintain the home.
To learn more, please visit the Consumer Financial Protection Bureau’s (CFPB) Reverse Mortgage: A Discussion Guide.
What disqualifies you from a reverse mortgage?
You can be denied a reverse mortgage due to credit issues, but only in specific situations. Lenders focus less on your credit score and more on whether your financial history shows you can keep up with ongoing property-related costs.
Common disqualifiers include delinquent federal debt, unpaid property taxes, or a pattern of missed housing payments. If your financial profile suggests you may struggle to maintain the home or pay required expenses, the loan may be denied or require additional safeguards like a LESA. Here’s an example of how that might work:
A 70-year-old homeowner, Ronald, has a credit score of 620 and applies for a reverse mortgage. While his credit history shows some late payments, he is current on property taxes and insurance and has no delinquent federal debt.
In this case, the lender may still approve the loan but require a LESA to help ensure future property expenses are covered. With a LESA, a portion of the loan proceeds is set aside to pay property-related costs such as taxes and insurance on the borrower’s behalf, rather than requiring those payments to be made out of pocket. This means Ronald may still be eligible despite past credit issues, while also helping reduce the risk of missed required obligations.
Can I get a reverse mortgage if I have outstanding federal debt?
Yes, but only in certain situations. You may still be eligible for a reverse mortgage if you have federal debt or owe federal taxes. However, the debt generally cannot be delinquent at the time you apply.
During the financial assessment, lenders review your credit history and public records to check for outstanding federal obligations, such as delinquent federal student loans or federal tax liens.
If you have delinquent federal non-tax debt—such as defaulted federal student loans—you may not be eligible for a reverse mortgage until the issue is resolved. In some cases, the debt may be treated as a mandatory obligation that is paid off at closing using proceeds from the reverse mortgage.
Federal tax debt is handled slightly differently. If you have delinquent federal taxes, you are generally not eligible for a reverse mortgage until the issue is addressed. However, you may still become eligible if the debt is resolved at or before closing, or if you:
- Have a valid payment agreement with the IRS, and
- Have made timely payments for the previous three months
The Office of the Comptroller of the Currency offers additional information about HECM eligibility requirements, including rules related to delinquent federal debt.
Because these rules are part of the financial assessment process, borrowers exploring a reverse mortgage with bad credit or outstanding obligations should speak with a qualified lender to understand how their specific situation may affect their options.
The chart below summarizes how different types of federal debt may affect reverse mortgage eligibility.
| Situation | Reverse mortgage eligibility |
| Federal debt but not delinquent | May be eligible |
| Delinquent federal non-tax debt | Must resolve before approval |
| Delinquent federal tax debt | Must pay off or enter IRS payment plan |
| IRS payment plan with 3 months of payments | May be eligible |
Can I take steps to improve my finances to get approved for a reverse mortgage?
Yes, taking steps to strengthen your financial situation may help improve your chances of approval. Here are four ways to improve your credit and overall financial picture before applying for a reverse mortgage.
Make sure you meet all the other requirements
Credit is only one part of reverse mortgage eligibility. Borrowers must also meet other financial eligibility requirements. In general, you will need to:
- Have sufficient equity in your property
- Be able to pay ongoing housing expenses, including property taxes and homeowners insurance
- Maintain the home
- Cover certain closing costs and fees, either out of pocket or through loan proceeds
Clean up past-due obligations
If you have past-due obligations, bringing those accounts current before applying may strengthen your application.
For example, catching up on property taxes, homeowners insurance, or other housing-related bills may reduce concerns during the financial assessment. In some cases, resolving overdue accounts ahead of time may help borrowers avoid a LESA, which requires a portion of loan proceeds to be reserved to cover future property charges.
Provide documentation for extenuating circumstances
Lenders may take certain hardships into account when reviewing credit history during a reverse mortgage application. If financial issues were caused by a temporary setback rather than ongoing financial instability, providing documentation may help explain the situation.
Examples of circumstances lenders sometimes review include:
- A serious illness or medical emergency
- The death of a spouse or close family member
- Divorce or separation that affected household finances
- Temporary job loss or reduction in income
Supporting documentation—such as medical records, legal documents, or written explanations—may help lenders better understand the context behind past credit issues.
Look for ways to reduce living expenses
Lowering monthly expenses may make it easier to demonstrate that you will be able to keep up with property-related obligations after obtaining a reverse mortgage.
Some homeowners consider options such as:
- Downsizing to a smaller, more affordable home to reduce monthly housing costs
- Sharing housing costs with family members or roommates
- Paying down debts or reducing recurring expenses
Taking steps like these may improve your financial outlook and help you meet the reverse mortgage credit requirements, even if your credit history is less than perfect.
→ Learn how reverse mortgage loan amounts are calculated in our guide, How much money can you get from a reverse mortgage?
Exploring your home equity options
A reverse mortgage with less-than-perfect credit may still be possible for some homeowners, depending on the financial assessment and other eligibility factors. If you’re not eligible right away, other options may help improve your financial situation or provide access to home equity.
Some homeowners consider alternatives to reverse mortgages, like:
- A home equity line of credit (HELOC): A HELOC provides a revolving line of credit secured by your home equity. Depending on your financial profile and credit history, it may offer flexible access to funds, though lenders typically look for stronger credit and income.²
- A home equity loan: A home equity loan allows you to borrow a lump sum against your home equity and repay it through regular monthly loan payments. Lenders typically require strong credit, stable income, and sufficient home equity to be eligible.2
- Downsizing: Selling your current home and moving to a smaller or less expensive property may free up equity while lowering monthly living expenses.
- Sharing housing costs: Living with family members, friends, or roommates may help ease financial pressure and improve your overall outlook.
Here’s a side-by-side look at these alternatives:
| Option | Credit score needed | Monthly payments | Key considerations |
| Reverse mortgage | No minimum (financial review) | None required* | Loan balance increases over time; must meet property-related obligations |
| HELOC | Typically 620–700+, varies by lender/product | Required | Variable rates and payments may change over time |
| Home equity loan2 | Typically 660+ | Fixed payments | Adds a second monthly payment; home is used as collateral |
| Downsizing/sharing housing costs | Not applicable | Varies (may include mortgage or rent payments) | May involve lifestyle changes or changes to housing situation |
*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Understanding these options may help you decide what next steps make the most sense for your situation. If you’re still exploring possibilities, try our reverse mortgage calculator to estimate how much equity you may be able to access.
Frequently asked questions about reverse mortgages
Does a reverse mortgage have a minimum credit score?
No. Most reverse mortgages, including HECMs, do not require a minimum credit score. Instead, lenders review your finances to ensure you will be able to keep up with property taxes, homeowners insurance, and home maintenance.
Do lenders check your credit for a reverse mortgage?
Yes. Lenders review your credit history as part of the financial assessment to understand your payment patterns and existing debt.
Can you get a reverse mortgage with poor credit?
Yes. Many homeowners may still be eligible for a reverse mortgage with bad credit because approval is based on overall financial stability, not just a credit score.
How can a bad credit history impact your ability to get a reverse mortgage?
A lower credit score doesn’t automatically make you ineligible. However, lenders may require a LESA to help ensure property taxes and homeowners insurance are paid.
What is a Life Expectancy Set-Aside (LESA)?
A LESA is a portion of the reverse mortgage loan proceeds reserved to pay future property taxes and homeowners insurance.
Can you be denied a reverse mortgage because of credit?
Yes, but usually only if credit issues indicate that a borrower may not be able to keep up with required housing obligations such as taxes, insurance, or home maintenance.
Can you get a reverse mortgage with debt?
Yes, in many cases. You may still be eligible if you have certain types of debt, but delinquent federal debt—such as unpaid federal taxes or defaulted federal loans—must usually be resolved before closing.
What disqualifies you from getting a reverse mortgage?
Common disqualifiers include not meeting the age requirement, insufficient home equity, unresolved federal debt, or being unable to cover property taxes, insurance, or home maintenance costs under reverse mortgage eligibility requirements.
Can improving your credit help you be eligible?
It may help in some cases. Resolving past-due debts or improving financial stability may make it easier to meet reverse mortgage credit requirements.
1These materials were not provided by HUD or FHA and were not approved by FHA or any government agency.
2Finance of America does not currently offer home equity loans or home equity line of credit products.
About the author
Lisa Lacy
Lisa Lacy is a Senior Web Content Writer at Finance of America and a journalist with more than 20 years of experience specializing in business, and technology. Her work has been published in The Wall Street Journal, The Financial Times, and numerous other leading outlets.
Disclaimer
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For tax advice, please consult a tax professional. For more information about whether a reverse mortgage fits into your retirement strategy, you should consult your financial advisor.
