Explore by category
What is a HomeSafe Second Mortgage?
In this article:
- How HomeSafe Second works
- What makes HomeSafe Second different from a HELOC or home equity loan
- Who is eligible for HomeSafe Second?
- What can you use HomeSafe Second funds for?
- How HomeSafe Second compares to a traditional reverse mortgage (HECM)
- How repayment works—and what happens over time
- The HomeSafe Second line of credit option
- Is HomeSafe Second right for you?
- When HomeSafe Second may not be the right fit
- Frequently asked questions
HomeSafe Second is a second-lien reverse mortgage from Finance of America designed for older homeowners who want to convert a portion of their home equity into cash—without refinancing their existing mortgage or taking on a new monthly mortgage payment.
Unlike traditional home equity products or cash-out refinancing, it sits as a second lien, requires no monthly mortgage payments, and does not rely on W-2 income for eligibility.
This makes it a notable option for homeowners, especially retirees, who want to access their home equity while preserving a low-rate first mortgage and avoiding new monthly payments.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
How HomeSafe Second works
HomeSafe Second is structured as a reverse second mortgage that may allow you to access a portion of your home equity without changing your existing first mortgage. Here’s how it works, step by step:
- You keep your current mortgage exactly as it is: Your existing first mortgage remains in place, including your interest rate, term, and monthly mortgage payment.
- HomeSafe Second is added as a second lien: Finance of America provides a new loan that sits behind your primary mortgage, secured by your home.
- You receive funds from your home equity: Based on your age, home value, and equity, you receive a lump sum payout (or, in some cases, access to a line of credit).
- No required monthly mortgage payments are added: Unlike a HELOC or home equity loan, there are no required monthly mortgage payments on the HomeSafe Second loan. You must continue paying your first mortgage, property taxes, insurance, and maintaining the home.
- Interest accrues over time: Because there are no monthly payments, interest is added to the loan balance over time.
- Repayment is deferred: The loan becomes due when a maturity event occurs, typically when you sell the home, move out, pass away, or otherwise fail to meet the terms of the loan.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
Here is a scenario to help you understand how HomeSafe Second works:
Susan and John locked in a low mortgage rate several years ago and have since built significant equity. Instead of refinancing into a higher rate or taking on a new monthly payment, they use HomeSafe Second to access a portion of that equity as cash—while keeping their original mortgage untouched.
They receive a lump sum, which they use to upgrade their patio and add safety features to their home. Over the years, they continue paying their first mortgage, property taxes, insurance, and maintaining the home.
After 10 years, they decided to downsize to a condo in a warmer climate. They sell the home, pay their remaining mortgage balance and their HomeSafe Second loan balance. The remaining equity is theirs to keep, and they use it to place a down payment on their new condo.
What makes HomeSafe Second different from a HELOC or home equity loan
HomeSafe Second may allow homeowners to access equity, but its structure differs in three key ways:
- No required monthly mortgage payments: HELOCs and home equity loans both require monthly payments—HomeSafe Second does not.
- No refinancing of your existing mortgage: A cash-out refinance replaces your current mortgage, often at a higher interest rate, depending on market conditions. HomeSafe Second doesn’t impact your first-lien mortgage, so you keep your existing rate and terms.
- No W-2 income or traditional DTI requirements: HELOCs and home equity loans rely on income and debt-to-income (DTI) ratios, which may limit eligibility for retirees. HomeSafe Second approval does not depend on W-2 income.
Finance of America does not currently offer home equity loans.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
Why keeping your existing mortgage rate matters
A large share of homeowners are locked into interest rates well below the current rate. Replacing that mortgage through a cash-out refinance means giving up that low rate and taking on a new loan with a higher interest rate—which can increase monthly mortgage payments and the total interest paid over the life of the loan.
HomeSafe Second avoids this tradeoff entirely. Because it sits as a second lien, your existing mortgage remains unchanged—same rate, same term, same payment.
Who is eligible for HomeSafe Second?
HomeSafe Second is designed for homeowners who have built meaningful equity and want to access it without taking on a new monthly payment or replacing their existing mortgage.
To be eligible, borrowers must meet the following criteria, at a minimum:
- Age requirement: At least 55 years old (Excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina and Texas where the minimum age is 62.)
- Homeownership: Own and live in the home as a primary residence, with an existing first mortgage.
- Sufficient home equity: Generally, at least 40% equity in the property.
- Credit profile: A credit score of 600 or higher.
- Geographic availability: Available in AZ, CA, CO, CT, FL, IL, IN, MI, MT, NV, OH, OR, SC, TX, UT, and WA.
Unlike traditional home equity products, eligibility is not based on W-2 income or standard DTI ratios. This approach is designed for retirees and near retirees whose income may come from Social Security, pensions, or investments rather than employment. Borrowers are subject to a financial assessment.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
What can you use HomeSafe Second funds for?
HomeSafe Second allows for flexible use of funds, but most borrowers tend to focus on two primary goals: updating their home and improving cash flow.
- Home improvement and aging in place: Many homeowners use the funds to make updates that allow them to stay in their home longer and more comfortably. This might include renovating the kitchen, replacing a roof, or adding safety features like walk-in showers, grab bars, or wider doorways.
- Getting a handle on debt: Others use the loan proceeds to pay off higher-interest debt, such as credit cards or personal loans. Reducing the number of required monthly payments may increase financial flexibility, but it does not reduce the total amount of debt.
Some borrowers may also choose to use funds for expenses such as helping a family member with education costs, covering healthcare costs, or building a financial cushion. While the use of funds is flexible, what sets HomeSafe Second apart is that it may help increase liquidity without disrupting an existing mortgage or adding new monthly obligations.
The right to remain in the home is contingent on paying property taxes and homeowners insurance, maintaining the home, and complying with the loan terms.
How HomeSafe Second compares to a traditional reverse mortgage (HECM)
HomeSafe Second and a home equity conversion mortgage (HECM) are both designed to let homeowners access equity without required monthly mortgage payments. However, there are core differences:
What happens to your existing mortgage
With a HECM, proceeds from the loan are first used to pay off your existing mortgage, and the new reverse mortgage becomes your primary loan. HomeSafe Second leaves your existing mortgage in place and adds a second lien. Your original rate and terms stay unchanged.
How your interest rate is affected
Because a HECM replaces the first mortgage, you effectively reset your interest rates at current market rates. HomeSafe Second preserves your existing mortgage rate, which may be significantly lower.
Terms and conditions on the first lien loan apply. Must meet combined loan value requirements based on a satisfactory appraisal.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
When each option might be a good fit
A HECM may make more sense for borrowers who want to eliminate their existing monthly mortgage payment entirely by paying off the first lien or have already paid off their home. HomeSafe Second is designed for homeowners who want to keep their current mortgage, especially if it carries a low rate, while accessing additional equity.
Both options share core features, including no required monthly mortgage payments on the new loan and repayment triggered by moving, selling, passing away, or failing to meet loan terms. The difference is not which product is “better,” but which structure aligns with your priorities and goals.
To learn more, please visit the CFPB’s “Reverse Mortgage: A Discussion Guide”
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.
How repayment works—and what happens over time
HomeSafe Second does not require monthly mortgage payments, but it is still a loan that must be repaid when certain conditions are met.
Repayment is triggered when:
- You sell the home
- You move out of the home
- You pass away
- Or you fail to meet the terms of the loan (such as not paying property taxes or insurance, or not maintaining the home)
Until one of these events occurs, no monthly mortgage payments are required. However, interest accrues over time and is added to the loan balance.
When the loan becomes due, it is typically repaid through the sale of the home. If there is remaining equity after both the first mortgage and HomeSafe Second are paid off, that equity belongs to you or your heirs.
HomeSafe Second is also a non-recourse loan1, which means neither you nor your heirs will owe more than the value of the home at the time of repayment. Even if the loan balance grows over time, repayment is limited to the proceeds from the home.
For heirs, this generally means they have options: they may sell the home to repay the loan or keep the home by paying off the balance—typically through refinancing or other assets.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
The HomeSafe Second line of credit option
In addition to the lump-sum option, Finance of America is expanding HomeSafe Second to include a line of credit (LOC) structure. Currently, this option is only available in California.
Instead of receiving all funds upfront, the line of credit allows you to draw from your available equity as needed, over time. This may be a better fit for homeowners who want flexibility for planned expenses, ongoing projects, or as a financial buffer.
The core structure remains the same:
- No required monthly mortgage payments
- Your existing first mortgage stays intact
- No W-2 income or traditional DTI requirements (All borrowers must still meet financial assessment and loan qualification criteria.)
The difference is in how you access the funds. Rather than a single disbursement, the line of credit provides ongoing access to equity, giving borrowers more control over when and how they use their funds.
This expansion reflects an evolution of HomeSafe Second—same foundational design, with added flexibility for different financial needs.
The line of credit option is not available in all states at this time.
Is HomeSafe Second right for you?
For many homeowners 55+, their home is one of their largest financial assets. HomeSafe Second from Finance of America was designed to help convert a portion of that equity into cash—without requiring a refinance or adding a new monthly mortgage payment.
As more homeowners look for ways to access housing wealth while preserving low mortgage rates, the following checklist can help you determine whether HomeSafe Second is a good fit. Check the box next to each statement that matches your situation.
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
1. Do you meet the basic eligibility requirements?
☐ I am at least 55 years old.*
☐ I own a home with an existing mortgage.
☐ I have built at least 40% equity in my home.
☐ My credit score is 640 or higher.
☐ My home is located in an eligible state. (AZ, CA, CO, CT, FL, IL, IN, MI, MT, NV, OH, OR, SC, TX, UT, WA.)
*For certain HomeSafe products only, excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina and Texas where the minimum age is 62.
2. What is your current mortgage situation?
☐ I currently have a mortgage rate I would prefer to keep.
☐ I am not interested in refinancing my existing mortgage.
☐ I want to access cash without changing the terms of my first mortgage.
3. What are your monthly cash flow priorities?
☐ I would prefer not to take on an additional monthly loan payment.
☐ Maintaining or improving my monthly cash flow is important to me.
☐ I rely on fixed or retirement-based income (or expect to soon).
4. Do you have income and where does it come from?
☐ My income primarily comes from Social Security, a pension, or investments.
☐ I may not be eligible for traditional financing based on W-2 income or DTI.
☐ I would prefer a solution that does not rely heavily on income-based eligibility criteria.
5. How do you plan to use the funds?
☐ Make home improvements or aging-in-place updates.
☐ Pay off higher-interest debt.
☐ Cover medical or healthcare expenses.
☐ Support family or education-related costs.
☐ Build a financial cushion for unexpected expenses.
The right to remain in the home is contingent on paying property taxes and homeowner’s insurance, maintaining the home, and complying with the loan terms.
6. Are you comfortable with the repayment structure?
☐ I understand there are no required monthly mortgage payments.
☐ I am comfortable with repayment occurring when I move, sell the home, pass away, or fail to meet the loan terms.
☐ I understand that interest will accrue over time, increasing the balance of the loan.
☐ I value the non-recourse feature, which means neither my heirs nor I would owe more than the home’s value.1
The borrower must meet all loan obligations, including meeting those under the first lien mortgage, living in the property as the principal residence and paying property charges, including property taxes, fees, 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.
7. Can you meet the ongoing responsibilities?
☐ I plan to live in my home as my primary residence for most of the year.
☐ I am prepared to maintain the condition of my home over time.
☐ I am able to pay property taxes, homeowners insurance, and any applicable HOA fees.
☐ I understand that not meeting these obligations could result in the loan becoming due.
8. What are your financial priorities?
☐ Keeping my current mortgage rate is a priority.
☐ Reducing monthly financial obligations matters more to me than minimizing long-term interest.
☐ I am looking for flexibility without restructuring my entire mortgage.
What your answers may indicate
Most checked: 21-30 boxes
HomeSafe Second could be a strong fit for your situation, especially if keeping your current mortgage and avoiding monthly payments are priorities.
Some checked: 10-20 boxes
It may be worth exploring further and comparing other options like HELOCs or a HECM.
Few checked: 0-9 boxes
A different home equity solution may better match your needs.
When HomeSafe Second may not be the right fit
HomeSafe Second may not be the best option if:
- You are comfortable refinancing your existing mortgage into a new rate.
- You prefer to make monthly payments to reduce your loan balance over time.
- Your top priority is minimizing total interest.
- You do not have significant home equity to access.
- You are looking for a short-term borrowing solution.
Exploring alternatives such as a HELOC, a home equity loan, or a traditional refinance may be more appropriate in these scenarios.
Ready for the next steps?
Learn more or connect with a Finance of America specialist to review your options in more detail. Call (800) 841-3723.
Frequently asked questions
What happens at the end of a HomeSafe Second loan?
The loan becomes due when you sell the home, move out, pass away, or fail to meet loan terms. It’s typically repaid through the sale of the home. Any remaining equity belongs to you or your heirs.
How much would a $50,000 home equity loan cost per month?
Monthly payments depend on the interest rate and loan term, but home equity loans require fixed monthly payments from the start. HomeSafe Second does not require a monthly mortgage payment; repayment is deferred until a maturity event.
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.
Do I still have to make payments on my first mortgage after getting a HomeSafe Second?
Yes. HomeSafe Second does not impact your first mortgage, so you must continue to make payments, along with covering property taxes, insurance, and home maintenance. Failure to meet loan terms will trigger the HomeSafe Second to become due and payable.
Does the lender own my home with a HomeSafe Second loan?
No, you retain ownership of your home, but Finance of America places a lien on your home, much like a traditional forward mortgage.
How much can I borrow with a HomeSafe Second reverse mortgage?
The amount depends on factors like your age, home value, and available equity. Generally, higher equity and older age may increase available proceeds.
Is HomeSafe Second the same as a reverse mortgage?
It’s a type of reverse mortgage but structured differently than a HECM. Instead of replacing your existing mortgage, it sits as a second lien—allowing you to keep your current loan intact.
1 A non-recourse reverse mortgage transaction limits the homeowner’s liability to the proceeds of the sale of the home (or any lesser amount specified in the credit obligation). Non-recourse means that you, or your estate, can’t owe more than the value of your home when the loan becomes due and the home is sold. Non-recourse means that if you default on the loan, or if the loan cannot otherwise be repaid, the lender cannot look to your other assets (or your estate’s assets) to meet the outstanding balance on your loan.
About the author
Danielle Antosz
Danielle Antosz is the Web Content Manager at Finance of America and a journalist with more than 10 years of experience whose work has appeared in MoneyWise, MSN, Yahoo! Finance, and The Motley Fool. She specializes in making complex financial topics accessible and is passionate about advancing financial literacy.
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.
