A mature couple reviewing financial documents at a kitchen table, thoughtfully planning their reverse mortgage decision
Seniors & Families

Reverse Mortgages in Indiana: What Seniors and Their Families Need to Know

June 20, 2026 Golden Girls of Real Estate

For many seniors in Northwest Indiana, the greatest financial asset is also the most underutilized — their home. A reverse mortgage can unlock that equity to fund retirement, home modifications, or long-term care. This guide explains how they work in plain language, what Indiana-specific rules apply, and whether it is the right move for your family.

At the Golden Girls of Real Estate, we do not sell financial products — but we understand the real estate implications of every financial decision our clients make.

What Exactly Is a Reverse Mortgage?

A reverse mortgage lets homeowners aged 62 and older borrow against home equity without making monthly mortgage payments. The most common type is the Home Equity Conversion Mortgage (HECM), insured by the FHA. Instead of you paying the bank each month, the bank pays you — as a lump sum, line of credit, monthly payments, or combination. The balance grows over time and is repaid when you permanently leave the home. You retain ownership as long as you live in it.

Who Qualifies?

  • Age: At least 62 (55 for some proprietary products)
  • Home ownership: Outright or small balance payable with proceeds
  • Primary residence: Not a second home or rental
  • HUD counseling: Required before closing — available throughout Lake, Porter, and LaPorte counties

How Much Can You Borrow?

Amounts depend on age, home value, and current interest rates. In communities like Munster, Crown Point, and Schererville, where median home values often range from $300,000 to $450,000, a homeowner in their 70s could access $150,000 to $250,000 or more.

What Are the Risks?

Growing loan balance: Interest accrues and reduces equity over time. Moving triggers repayment: If you leave the home for more than 12 consecutive months — to assisted living, a nursing facility, or to live with family — the loan becomes due. This is critical for families in Highland, Dyer, and Cedar Lake who may need care that cannot be provided at home. Ongoing obligations: You must pay property taxes, maintain insurance, and keep the property in good condition.

Can It Affect Government Benefits?

Proceeds are not taxable income and do not affect Social Security or Medicare. However, if you receive Medicaid or SSI, the additional funds could impact eligibility. Consult an elder law attorney before proceeding.

Alternatives to Consider

  • HELOC or home equity loan: Predictable repayment terms and potentially lower rates.
  • Downsizing: Selling and purchasing smaller frees equity. Schererville and Hammond offer options in the $150,000 to $250,000 range.
  • Selling and renting: Flexibility and eliminates maintenance costs.
  • Family assistance: Adult children contribute to housing costs in exchange for eventual inheritance.

If you are exploring options for accessing home equity, the Golden Girls of Real Estate can help evaluate how a reverse mortgage — or an alternative — fits into your plan. Reach out today for a confidential conversation.

Frequently Asked Questions

Got questions? Here are answers to the most common things readers ask after reading this article.

What is a reverse mortgage and how does it work?
A reverse mortgage allows homeowners aged 62 and older to convert part of their home equity into cash without selling the home 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). The loan is repaid when the homeowner permanently leaves the home — whether through sale, passing away, or moving to a care facility. Interest accrues on the balance over time, and the homeowner retains title to the property.
Am I eligible for a reverse mortgage in Indiana?
To qualify for a HECM reverse mortgage, you must be at least 62 years old, own your home outright or have a low mortgage balance that can be paid off with loan proceeds, and live in the home as your primary residence. The home must meet FHA property standards — including being a single-family home, a 1-to-4 unit property, or an FHA-approved condominium. You are also required to attend HUD-approved housing counseling before closing. In Northwest Indiana, counseling agencies serve Lake, Porter, and LaPorte counties.
What are the risks and downsides of a reverse mortgage?
Reverse mortgages are not right for everyone. Key risks include: the loan balance grows over time as interest accrues, which reduces the equity remaining in your home. If you need to move to assisted living or a nursing facility for more than 12 consecutive months, the loan becomes due and you may need to sell the home. Closing costs and servicing fees can be higher than a traditional mortgage. There are also ongoing obligations — you must maintain the home, pay property taxes, and keep homeowner insurance current. Failure to meet these requirements can trigger loan default.
Can a reverse mortgage affect my Medicare or Social Security benefits?
Reverse mortgage proceeds are not considered taxable income, so they generally do not affect Social Security or Medicare benefits. However, if you receive Medicaid or Supplemental Security Income (SSI), the additional funds could impact your eligibility since those programs have asset and income limits. It is important to consult with a financial advisor or elder law attorney in Northwest Indiana before proceeding, especially if you rely on means-tested government benefits.
What are the alternatives to a reverse mortgage for accessing home equity?
Several alternatives may work better depending on your situation: a home equity line of credit (HELOC) or home equity loan provides access to equity with more predictable repayment terms. Downsizing to a smaller, more affordable home frees up equity and reduces expenses. Selling the home and renting may also make financial sense in some cases. For seniors who need care, some families explore selling the home to fund assisted living costs. A trusted real estate agent and financial advisor can help evaluate which option best fits your goals.
How does a reverse mortgage work if I want to sell my home later?
You can sell your home at any time. When the home is sold, the reverse mortgage balance — including accrued interest and fees — is repaid from the sale proceeds. If the home sells for more than the loan balance, you or your heirs keep the difference. If the sale does not cover the full balance, because the loan is FHA-insured, neither you nor your heirs owe the difference. This is called the non-recourse protection. In a strong Northwest Indiana market, many seniors find their home equity exceeds the loan balance significantly.
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