Reverse Mortgage Loan Borrower Characteristics
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Statistical and demographic data about reverse mortgage loan borrowers isn’t readily available to the average person. However, a few academic studies have delved deep into the records at HUD and come up with facts and figures that provide an interesting statistical snapshot. The following data comes from the National Council on Aging study, “Use Your Home to Stay at Home”:
- The average age of HECM borrowers has declined, from age 76 in 2000 to age 74 in 2004.
- About half (48 percent) of HECM borrowers in 2004 were single women.
- The proportion of single women has declined since 2000 when this group represented 57 percent of reverse mortgage borrowers.
- Couples represent about 36 percent of HECM borrowers, up from 30 percent in 2000.
- Based on the latest data from HUD, average property values of HECM borrowers increased from $142,000 in 2000 to $214,000 in 2004
- Most (86 percent) HECM borrowers in 2000 were non-Hispanic whites. About 9 percent are non-Hispanic African Americans. Other racial/ethnic minorities represent the remaining 4 percent of borrowers. In general, the racial and ethnic composition of HECM borrowers is similar to the general population of older homeowners.
- Non-Hispanic African Americans participate in the HECM program at a higher rate (9.2 percent) than they are presented in the general population of older homeowners (7.8 percent).
- Based on focus groups of HECM participants and anecdotal evidence from lenders, it appears that a majority of HECM borrowers in 2000 had children.
- Industry data on loans originated between 2000-2003 shows that three-quarters of borrowers (75 percent) are age 70 or older at the time of application for the loan. The predominance of relatively older borrowers among the reverse mortgage population is not surprising. This is because the amount that borrowers can get from their home is greater at older ages.
- About half (52 percent) of borrowers are in the 70 to 79 age group—a higher proportion than among the general population of elderly homeowners (41 percent).
- Close to half of reverse mortgage borrowers (46 percent) have homes worth $100,000 to $199,999, compared to only about one-third of general homeowners (34 percent).
- Elders who take out a reverse mortgage are also more likely than the general homeowner population to own expensive homes, worth $200,000 or more.
- Among borrowers who took out a loan between 2000 and 2003, three quarters (76 percent) had incomes of $25,000 or less.
- In 2004, the average income of borrowers was $17,000. This is relatively low when compared to the national household median income of $25,634 among homeowners age 65 and older in 2003 (U.S. Census Bureau 2004).
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