Many older adults own their homes, but struggle to make ends meet due to limited income. Accessing home equity can be a useful financial tool for some older homeowners to age in place.
Get the facts on seniors and home equity and ways older adults can “use their home to stay at home.”
Snapshot: Using Your Home’s Equity to Age in Place
| Can be used for | How it works | |
|---|---|---|
|
Home equity loan | One-time expenses, such as home repairs or debt consolidation | Receive a lump sum and make fixed monthly payments |
| Home equity line of credit (HELOC) | Ongoing or unexpected expenses | Borrow as needed up to your credit limit; monthly payments required |
| Reverse mortgage | Supplementing retirement income | Available to eligible homeowners age 62+; no monthly payments; you must pay property taxes, homeowners insurance, and maintain home |
Facts on housing and older adults
- More than one in three older households spent over 30% of their income on housing in 2023.1
- In 2023, 58% of older renters and 43% of older homeowners were considered cost-burdened, meaning they have little left over after housing costs for expenses like food, health care, and other essentials.1
- Older adults who require long-term care services face an even greater cost burden. In 2022, fewer than 15% of those age 75+ could afford both housing and long-term care services.2
- Financial stress from housing costs and poor housing quality are linked to worse health outcomes among older adults. Seniors living in lower quality housing are at increased risk of falls and more likely to enter a nursing home as their health worsens.3
Facts on older adults and home equity
- As of early 2026, more than 78% of Americans age 65 and older own their home.4
- The median home equity held by Americans age 65+ in 2025 was $250,000.4
- Nearly 1.4 million older homeowners have taken advantage of HECM loans to tap into their home equity since 1990.5
How can seniors use their home equity?
Below are some options that may allow you to tap into your home’s stored value while remaining in your home.
HELOCs and home equity loans
If you need extra funds in retirement, a home equity loan or home equity line of credit (HELOC) may allow you to borrow against the equity you've built over the years.
- Home equity loan: A home equity loan lets you borrow against the equity you've built in your home. Unlike a home equity line of credit (HELOC), you receive the money as a one-time lump sum and repay it through fixed monthly payments over a set period. Since this type of loan is secured by your home, interest rates are often lower than those for unsecured loans (e.g., credit cards).
- Home equity line of credit (HELOC): This option lets you borrow against the equity you've built in your home. Instead of getting the proceeds in one lump sum, you're approved for a specific credit limit. You can borrow only the amount you need, when you need it, up to that limit.
Reverse mortgages
A reverse mortgage is a type of home loan that allows older adults to convert the equity in their home to cash to meet a wide range of financial needs. Currently the primary product on the reverse mortgage market is the Home Equity Conversion Mortgage (HECM). A HECM is a product insured by the Federal Housing Administration (FHA). Homeowners must meet several basic eligibility requirements to apply for a HECM loan:
- Be age 62 or older
- Occupy the home as the primary residence
- Own the home (or have paid off a considerable amount of the original loan)
- Live in an eligible property
- Not be delinquent on any federal debt
With a reverse mortgage, the borrower accesses cash from their home equity, and retains the title of the home. Borrowers must fulfill the obligations below or they may be at risk of foreclosure:
- Keep the home in good repair
- Pay property taxes and homeowners’ insurance
- Occupy the house as their primary residence
In addition to foreclosure risk, there are other risks with taking out a reverse mortgage, including:
- High closing costs
- Effects on benefits and heirs
- Chance of exhausting funds too quickly
Any older homeowner considering a reverse mortgage must first meet with a government-approved reverse mortgage counselor before their loan application can be processed. Learn more about reverse mortgage counseling.
Where can I get more information?
NCOA, through partnerships and resources, helps older adults explore how to use their home equity wisely. Below are some options that can help you make an informed decision.
Speak to a counselor about your home equity options
NCOA has a longstanding partnership with GreenPath Financial Wellness–a nonprofit financial wellness organization approved by the U.S. Department of Housing & Urban Development (HUD) to counsel older adults on a range of services to help them save money.
Counseling sessions last between one to two hours and follow a federally mandated protocol. GreenPath counselors can also help you apply for benefits and find local community services. To speak with a counselor, call toll-free 1-866-217-0543. All calls are free and confidential.
You can also search for a HUD-approved counselor in your area.
Download NCOA’s free consumer guide to reverse mortgages
NCOA’s Use Your Home to Stay at Home© is the official federally approved consumer booklet for older homeowners considering a reverse mortgage. Explore our reverse mortgage guide now.
Find financial assistance for housing, food, and more
NCOA’s BenefitsCheckUp® is a gateway to programs and resources that empower older adults and people with disabilities to improve their health and independence. This free online tool offers information on a range of programs that can help older adults afford housing, including public housing, home repair, weatherization, and utility assistance. To get started, visit BenefitsCheckUp and enter your ZIP code.
Frequently asked questions (FAQ)
What is a reverse mortgage?
A reverse mortgage is a loan that allows homeowners age 62+ to convert part of their home equity into cash without selling their home or making monthly loan payments. The loan is typically repaid when you sell your home, move out permanently, or pass away.
How does a reverse mortgage work?
With a reverse mortgage, you borrow against the equity in your home and receive the money as a lump sum, monthly payments, a line of credit, or a combination of these options. You stay the owner of your home. But you must keep paying property taxes, homeowners insurance, and maintain the property according to the loan’s requirements.
What's the difference between a home equity loan and a HELOC?
A home equity loan gives you a one-time lump sum that you repay with fixed monthly payments. A home equity line of credit (HELOC), on the other hand, works more like a credit card. It lets you borrow only what you need, when you need it, up to your approved credit limit.
Sources
1. Joint Center for Housing Studies. One in Three Older Households Is Cost Burdened. August 11, 2025. Found on the internet at https://www.jchs.harvard.edu/blog/one-three-older-households-cost-burdened
2. National Low Income Housing Coalition. Fewer Than 15% of Older Adults Can Afford Combined Costs of Housing and Long-Term Care Services. Dec. 11, 2023. Found on the internet at: https://nlihc.org/resource/fewer-15-older-adults-can-afford-combined-costs-housing-and-long-term-care-services
3. Population Reference Bureau. More Than Shelter: How Housing Affordability Is Linked to Older Americans’ Health. April 5, 2024. Found on the internet at: https://www.prb.org/articles/more-than-shelter-how-housing-affordability-is-linked-to-older-americans-health/
4. Investopedia. Average Home Equity for Retirees in 2025: Surprising Insights Revealed. December 30, 2025. Found on the internet at https://www.investopedia.com/average-home-equity-for-retirees-11862029
5. National Reverse Mortgage Lenders Association. Annual HECM Production Numbers. Found on the internet at https://www.nrmlaonline.org/annual-hecm-endorsement-chart
