Delaware Reverse Mortgage: HECM Loans for Homeowners 62+ in DE & MD (2026 Guide)

By John R. Thomas, NMLS #38783 | Branch Manager and Mortgage Loan Officer | John Thomas Team with AnnieMac Home Mortgage | 302-703-0727

If you own a home in Delaware or Maryland and you are 62 or older, a reverse mortgage may be one of the most powerful — and most misunderstood — financial tools available to you. This guide covers what a reverse mortgage actually is, how HECM loans work, who qualifies, what it really costs, what the myths get wrong, and how homeowners across Wilmington, Newark, Dover, Baltimore, Columbia, and Silver Spring are using them to fund retirement without selling their homes. If you want the 2026 numbers in detail, see the dedicated 2026 HECM reverse mortgage loan limits page.

What Is a Reverse Mortgage (HECM Loan) in Delaware and Maryland?

Quick Answer: A reverse mortgage in Delaware and Maryland is a federally insured HECM loan that allows homeowners age 62 and older to convert a portion of home equity into cash without making monthly mortgage payments. The borrower keeps title and ownership of the home, and the loan is repaid when the home is sold, the last borrower moves out permanently, or passes away. In both Delaware and Maryland, most reverse mortgages are FHA-insured Home Equity Conversion Mortgages, commonly called HECM loans. These follow federal HUD and FHA guidelines, including borrower age, HUD-approved counseling, eligible property types, and the annual HECM maximum claim amount.

Reverse mortgages are not a one-size-fits-all solution. For some Delaware and Maryland homeowners, a HECM solves a real cash-flow problem and lets them stay in the home they love. For others, a Delaware HELOC, a cash-out refinance, or even downsizing makes more sense. The right answer depends on your age, your home value, your retirement income, your long-term plans for the home, and what you want to leave to heirs. That is the conversation this guide — and a no-pressure call with John Thomas — is designed to help you work through.

---

Not sure if a reverse mortgage is right for you? In this 6-minute video, John Thomas walks through everything Delaware and Maryland homeowners age 62 and older need to know — what a reverse mortgage actually is, how the HECM loan works, what it costs, and what questions to ask before making any decision.

How Does a Reverse Mortgage Work?

A reverse mortgage works in the opposite direction of a traditional, or forward, mortgage. With a forward mortgage, you make monthly payments to the lender and your loan balance goes down over time as your equity goes up. With a reverse mortgage, the lender pays you — either as a lump sum, monthly payments, a growing line of credit, or some combination — and the loan balance goes up over time as accrued interest, mortgage insurance premiums, and fees are added on top of the principal you have drawn.

You keep title to your home for as long as you live in it as your primary residence and you continue paying property taxes, homeowners insurance (and flood insurance if applicable), HOA dues, and basic home maintenance. The loan becomes due and payable when the last borrower on the loan permanently moves out of the home, sells the home, or passes away. At that point, the home is typically sold to repay the loan, and any remaining equity belongs to you or your heirs.

HECM reverse mortgages are non-recourse loans. That means if the loan balance ends up exceeding the home’s value when the loan is repaid, neither you nor your heirs are personally liable for the difference. FHA mortgage insurance — which you pay into through the upfront and annual MIP — covers the shortfall. Heirs cannot be pursued for the difference, and they cannot lose other assets to satisfy the loan.

Delaware Reverse Mortgage Requirements in 2026: Who Qualifies?

To qualify for a HECM reverse mortgage in Delaware or Maryland, you generally need to meet the following federal HUD requirements:

• Age 62 or older. You must be at least 62 at the time of closing. If two borrowers are on the loan, the lender uses the youngest borrower’s age to calculate the loan amount, which generally produces a smaller proceeds amount than a single older borrower would receive.
• Primary residence. The home must be your primary residence. Vacation homes, second homes, and pure investment properties do not qualify for HECM.
• Sufficient home equity. Most homeowners need substantial equity — typically 50% or more — though the exact amount depends on your age, current interest rates, and home value. Any existing mortgage balance must be paid off at closing, generally using HECM proceeds.
• HUD-approved counseling. Before applying, federal law (24 CFR 206.41) requires that you complete reverse mortgage counseling with a HUD-approved counseling agency. Delaware adds a state-law layer: under Delaware Code Title 5, § 2244, a Delaware lender cannot finalize a reverse mortgage loan until it has received written certification from an independent housing counselor attesting that the borrower has received counseling covering the topics required under 12 U.S.C. § 1715z-20(f). Counseling is typically done by phone and takes 60 to 90 minutes; Delaware does not mandate in-person counseling, so most borrowers complete it from home.
• HUD financial assessment. Since 2015 (HUD Mortgagee Letter 2014-22), lenders must conduct a financial assessment to confirm you have the income and credit history to maintain property taxes, homeowners insurance, and home upkeep. If the assessment identifies concerns, a Life Expectancy Set-Aside (LESA) may be required.
• Property meets FHA standards. The home must pass an FHA appraisal and meet HUD’s minimum property standards. Required repairs identified by the FHA appraiser may need to be completed.
• No delinquent federal debt. You cannot be behind on federal debt, such as federal taxes or federal student loans. In some cases the delinquency can be paid off from the loan at closing.
• Your spouse’s age counts, even if your spouse is not on the loan. If you are married, the age of an eligible non-borrowing spouse is used to figure how much is available. Age is counted at the nearest birthday, so a birthday coming up soon can change the amount.

There is no minimum credit score requirement for a HECM in the way there is for a forward FHA loan, but credit history is reviewed as part of the financial assessment. Income is also reviewed — not to confirm you can make a mortgage payment (you will not have one) but to confirm you can keep up with taxes, insurance, and basic property obligations going forward.

What the HUD Financial Assessment Looks At

Credit scores are not used. The underwriter looks at your payment history instead (HUD HECM program):

• Mortgage and installment loans (like car loans): paid on time for the last 12 months, and no more than two 30-day late payments in the last 24 months.
• Credit cards: no payment more than 90 days late, and no three payments more than 60 days late, in the last 12 months.
• Property taxes, homeowners insurance and HOA dues: paid on time, with no delinquencies in the last 24 months.
• Residual income: the money left over each month after your bills must meet HUD’s minimum for your household size and region.

A bankruptcy does not disqualify you by itself. The underwriter looks at when it was discharged, or how the payment plan has been paid. A one-time event such as a serious illness or the death of a spouse can explain a credit problem, and strengths such as large savings can offset a weakness.

The result can be more than a yes or a no. If there is a concern, the underwriter can require a Life Expectancy Set-Aside (LESA): money held back from the loan so the servicer pays your property taxes and insurance, much like an escrow account. A LESA reduces the money available to you, and some borrowers choose one on purpose so they never have to think about those bills.

What Types of Homes Are Eligible for a Reverse Mortgage?

HECM reverse mortgages are available on most owner-occupied primary residences in Delaware and Maryland, including:

• Single-family detached homes (most common)
• Two- to four-unit homes, as long as the borrower occupies one of the units as their primary residence
• FHA-approved condominiums. The condo project must be on the FHA-approved condo list, or in some cases, may be eligible for FHA single-unit approval. We check this upfront before you commit to anything.
• Townhomes (typically eligible as long as the structure meets FHA property standards)
• Manufactured homes meeting FHA requirements (titled as real estate, on a permanent foundation, built after June 15, 1976 with a HUD label, generally double-wide or larger)

Properties that are typically not eligible include vacation homes, second homes, pure investment properties, cooperatives (co-ops), and single-wide manufactured homes. Mixed-use properties may or may not qualify depending on the percentage of the property used for non-residential purposes.

What Are the 2026 Reverse Mortgage Loan Limits?

For loans with FHA case numbers assigned on or after January 1, 2026, the HECM maximum claim amount is $1,249,125 nationwide, including all Delaware and Maryland counties. This is up from $1,209,750 in 2025 — a 3.3% year-over-year increase. Unlike forward FHA loan limits, which vary by county, the HECM limit is one consistent national cap. Current as of May 2026.

The maximum claim amount sets the highest home value FHA will use when calculating your proceeds. If your home appraises for $1,500,000, FHA still only uses $1,249,125 in the calculation. A home worth more than the limit still qualifies for a HECM; FHA simply counts the value up to $1,249,125. Private “jumbo” reverse mortgages, which can count higher values, are not something our team offers in Delaware or Maryland (see Private Reverse Mortgages below).

How much you actually receive depends on a combination of (1) the youngest borrower’s age, (2) current expected interest rates, (3) your home’s appraised value up to the FHA cap, and (4) the payout structure you choose. A reverse mortgage usually provides less than half of the home’s value. For example, a 72-year-old with a $500,000 home and a 45% factor would have a principal limit of about $225,000 before any payoff and closing costs (illustration only; the factor changes with age and rates). For a more detailed breakdown by age and home value, see John Thomas’s dedicated guide: 2026 HECM Reverse Mortgage Loan Limits.

How Is Your Reverse Mortgage Amount Figured?

Quick Answer: HUD multiplies your home value, up to the HECM limit, by a percentage based on the youngest borrower’s age and the expected rate. What must be paid at closing, such as an existing mortgage, comes out of that amount, and the rest is yours to use. It is usually less than half of the home’s value.

1. Maximum claim amount. Your home value or the HECM limit ($1,249,125 in 2026), whichever is less.
2. Principal limit factor. A percentage from HUD’s table, based on the youngest borrower’s (or eligible non-borrowing spouse’s) age and the expected rate. Older age and lower rates mean a higher percentage.
3. Principal limit. The maximum claim amount times that percentage: the most the loan can provide.
4. Mandatory obligations. What must be paid at closing: existing mortgage and liens, upfront FHA mortgage insurance, the origination fee, closing costs, any delinquent federal debt, and any required repairs or set-aside.
5. Net principal limit. The principal limit minus the mandatory obligations. This is the money you can actually use.

Short to close. If what must be paid at closing is more than the principal limit, you would bring the difference to closing (from savings, for example), or the loan does not work. We check this in the first conversation.

Paying Off Debts on the Home (Lien Seasoning)

Every mortgage and lien on the home is paid off at closing. HUD also looks at how long a debt has been on the home, so a reverse mortgage is not used to pay off money borrowed just before applying. A lien is fine if it has been on the home for more than 12 months, or if it gave you less than $500 in cash (a loan used to buy or build the home usually qualifies). A recent cash-out refinance, or a newer home equity line you have drawn on, can be a problem.

• Do not take out new debt on the home before applying. Tell us about any new loan or line of credit on the home.
• A HECM cannot pay off credit cards or other unsecured debt at closing. You can use the money available to you after closing for those bills.

Educational Example: Estimated HECM Proceeds on a $500,000 Home

HECM proceeds are calculated using the Principal Limit Factor (PLF), which combines the youngest borrower’s age with the expected interest rate to produce the percentage of home value available to the borrower. Older borrowers and lower expected rates produce higher PLFs (more proceeds); younger borrowers and higher expected rates produce lower PLFs. A reverse mortgage usually provides less than half of the home’s value. The example below walks one home through each step.

The first-year limit in this example. In the first 12 months you can use the greater of 60% of the principal limit ($135,000) or the mandatory obligations plus 10% ($111,000 + $22,500 = $133,500). The greater amount is $135,000. After the $111,000 of obligations are paid, about $24,000 is available in year one. On an adjustable-rate HECM, the remaining $90,000 becomes available after the first 12 months. On a fixed-rate HECM, the year-one amount is all you would receive.

For a complete, personalized estimate based on your exact age, home value, current rates, and existing mortgage, call John Thomas at 302-703-0727 or schedule a 30-minute consultation.

Reverse Mortgage Costs Explained

Reverse mortgages have closing costs that are typically higher than a forward mortgage, mainly because of FHA mortgage insurance. The good news is that most of these costs can be financed into the loan, so you generally do not need to bring large sums of cash to closing. Here is what to expect:

• Upfront FHA Mortgage Insurance Premium (MIP). Currently 2% of the home value or HECM maximum claim amount (whichever is lower). This protects the FHA insurance fund and, in turn, you and your heirs — it is what makes the loan non-recourse. Generally financed into the loan.
• Annual FHA MIP. 0.5% of the outstanding loan balance per year. This accrues on the loan over time rather than being paid out-of-pocket.
• Origination fee. Capped by HUD at the greater of $2,500 or 2% of the first $200,000 of home value plus 1% of any value above that, with a maximum of $6,000 total. Generally financed into the loan.
• Third-party closing costs. FHA appraisal, title insurance, recording fees, credit report, flood certification, and similar standard third-party costs.
• Servicing fee (if applicable). Some lenders charge a monthly servicing fee (capped at $30 or $35 depending on loan type); many lenders waive this. Confirm with your specific lender.
• HUD-approved counseling fee. Typically $125 to $200, paid to the counseling agency directly. This is usually the only out-of-pocket cost before closing.
• Interest accrual. Interest is charged on the outstanding loan balance, with rates that may be fixed (for lump-sum payouts) or adjustable (for line-of-credit and term/tenure payouts). Interest is added to the loan balance — you do not pay it out of pocket — which is why the balance grows over time. Rates change daily; call for the current rate.

Because most costs are financed into the loan, the practical question is not “how much do I have to pay today” — it is “how does my equity look over time?” That is exactly the math we walk through in a consultation, side by side with your alternatives.

Reverse Mortgage Pros and Cons

A reverse mortgage is a useful tool in some retirement situations and the wrong tool in others. Here is an honest look at both sides.

Reverse Mortgage vs HELOC vs Cash-Out Refinance

Quick Comparison: Here is how a reverse mortgage compares to a Delaware HELOC and a cash-out refinance based on payments, qualification, and risk. If you are 62 or older, all three may be options worth comparing. If you are under 62, the reverse mortgage is off the table and the comparison narrows to HELOC vs cash-out refi.

What About My Heirs?

This is the question that comes up in nearly every reverse mortgage conversation, and the answer is straightforward: your heirs have options, and they cannot be left owing more than the home is worth.

When the last borrower passes away or permanently moves out, the loan becomes due. Heirs typically have up to 12 months (with potential extensions) to settle it, and they generally have three choices:

• Sell the home and pay off the loan. If the home sells for more than the loan balance, the remaining equity goes to the heirs. This is the most common path.
• Refinance the loan and keep the home. Heirs can pay off the reverse mortgage by refinancing into a traditional forward mortgage if they qualify, or pay the balance directly with other funds.
• Deed the home back to the lender. If the loan balance exceeds the home’s value, heirs can use a deed in lieu of foreclosure to transfer the property to the lender and walk away with no further financial obligation. Because HECM is non-recourse, FHA insurance covers the shortfall. Heirs are not personally liable.

If the loan balance is more than the home is worth and your heirs want to keep the home, they pay the lesser of the loan balance or 95% of the current appraised value. FHA insurance covers the rest. The 95% option is available only once the loan is due and payable, usually after the last borrower passes away. While you are living in the home, paying off the loan by refinancing means paying the full balance; if you sell, you still never owe more than the home is worth. This is one of the conversations we walk through with you and, where appropriate, with your adult children, before you finalize anything.

You do not have to make this decision alone. Many of the homeowners we work with bring an adult child, family member, or financial advisor to the consultation — either in person at the Newark office or by phone. Talking through the long-term equity impact with the people who will eventually inherit the home is often the most useful part of the process.

Non-Borrowing Spouse Protections

If you are married and one spouse is under 62, your spouse may still be protected from foreclosure if you pass away first or move out permanently. This is one of the most misunderstood parts of HECM — and one that has changed meaningfully in the last decade.

Under HUD Mortgagee Letters 2014-07 and 2015-15 (and the September 19, 2017 final regulation), an eligible non-borrowing spouse (NBS) can remain in the home and defer repayment of the loan after the borrowing spouse passes away or permanently moves out, subject to meeting HUD deferral conditions. These include:

• The non-borrowing spouse must be properly identified at closing and meet HUD’s eligibility requirements at that time.
• The home must continue to be the non-borrowing spouse’s primary residence.
• The non-borrowing spouse must continue paying property taxes, homeowners insurance, and maintaining the property.
• The non-borrowing spouse must establish legal ownership or the legal right to remain in the home within a specified timeframe after the borrower’s death.

The trade-off: during the deferral period, the non-borrowing spouse cannot access additional reverse mortgage proceeds. Any remaining line of credit or scheduled payments stop. The spouse can live in the home, but the loan does not provide further cash flow.

An eligible non-borrowing spouse is married to the borrower at closing, lives in the home as a primary residence, and is named in the loan documents. A spouse who does not live in the home has no deferral protection: the loan becomes due when the borrower passes away.

The age of an eligible non-borrowing spouse is now used in the actuarial calculation that determines how much you can borrow, which generally means a smaller loan amount when one spouse is meaningfully younger. We walk through this trade-off with couples in detail during the consultation.

What Are My Borrowing Options?

HECM borrowers can choose from five payout structures, depending on which payment plan fits your situation best:

• Lump sum. Receive your money at closing. A fixed-rate HECM pays only a lump sum. Common for borrowers who have a specific large need (paying off an existing mortgage, funding a renovation, paying off high-interest debt).
• Line of credit. Access funds as needed (adjustable-rate HECM only). The unused part grows at the same rate as the loan balance: the note rate plus the 0.5% annual mortgage insurance. It cannot be reduced because home values fall, as long as you meet the loan terms. If you make voluntary payments, the amount you pay goes back into your line of credit. Often the most powerful long-term retirement planning option because the available credit increases over time.
• Term payments. Equal monthly payments for a specific number of years you choose.
• Tenure payments. Equal monthly payments for as long as you live in the home as your primary residence.
• Modified term or tenure. Combine a line of credit with term or tenure payments — useful when you want both monthly cash flow and a reserve for future needs.

The right structure depends on your cash flow needs, your tax situation, your other retirement income, and your long-term goals for the home. There is no single best option — it depends on your situation.

Fixed Rate vs. Adjustable Rate HECM and the First-Year Limit

Quick Answer: A fixed-rate HECM pays one lump sum at closing and nothing after that. An adjustable-rate HECM can pay a line of credit, monthly payments or a mix, and the rest of your money becomes available after the first 12 months.

The first-year limit. HUD limits how much you can take in the first 12 months so the money is not used up too fast (HUD HECM program). In year one you can use the greater of 60% of your principal limit, or the amounts that must be paid at closing plus 10% of the principal limit. On an adjustable-rate HECM the rest becomes available after year one. On a fixed-rate HECM, the first-year amount is all you will ever receive; any principal limit left over is not available later. This is the biggest trade-off between the two.

Two rates you will hear about. The interest rate is charged on your loan balance; on an adjustable HECM it is a published index plus a fixed margin. The expected rate is a separate, longer-term rate HUD uses only to figure how much money is available: a higher expected rate means less money. The lowest interest rate is not always the best choice, because the rate option changes the amount available, the costs, and how fast a line of credit grows.

Taxes, Benefits and Living With a Reverse Mortgage

• Taxes. The IRS treats reverse mortgage money as loan advances, not income. Interest is generally deductible only when it is actually paid, usually when the loan is paid off, and your servicer may send you a Form 1098. Ask your tax advisor (CFPB).
• Social Security and Medicare. Not affected.
• SSI and Medicaid. These depend on income and assets. Money you draw and keep past the month you receive it can count as an asset. If you receive these benefits, draw only what you need and talk with a benefits advisor first.
• No prepayment penalty. You can pay off the loan, refinance it or sell the home at any time.
• Voluntary payments. You can make payments at any time. A payment covers mortgage insurance and fees first, then interest, then the amount borrowed.
• Yearly occupancy certification. About once a year, around the closing anniversary, you sign and return a form confirming you still live in the home.
• Statements. Your servicer sends regular statements showing the loan balance and any available line of credit.

What About Reverse Mortgage Scams?

Unfortunately, reverse mortgages have been a target for scams aimed at seniors. The basic rules to protect yourself:

• Never agree to a reverse mortgage on an unsolicited call. Legitimate lenders do not cold-call seniors with reverse mortgage offers.
• Never share financial information with contacts you did not initiate. If you did not call them, do not trust them with bank account numbers, Social Security numbers, or personal financial details.
• You should never have to pay for information about reverse mortgages. Counseling fees are paid to HUD-approved counseling agencies (typically $125 to $200), not to lenders or salespeople. There should be no upfront fees to evaluate whether a reverse mortgage is right for you.
• Always work with a licensed, HUD-approved lender. Verify NMLS numbers at nmlsconsumeraccess.org. John Thomas is NMLS #38783.
• Get everything in writing, with a verifiable physical address and phone number. If a salesperson is reluctant to give you written documentation or refuses to identify their company’s physical office, that is a red flag.
• Be cautious of “no cost” or “never pay again” pitches. Reverse mortgages have closing costs — anyone telling you otherwise is either misinformed or misleading you.
• No one can require you to buy another product. A reverse mortgage must never be tied to buying an annuity, insurance or an investment. Be wary of anyone who wants the loan money used to buy one.
• Watch for pressure from people around you. A relative, caregiver or “advisor” who does all the talking, pushes for the loan, or wants the money is a warning sign. Take your time and include family you trust. That is what HUD counseling is for.

Common Reverse Mortgage Myths — Debunked

• Myth: “The bank takes my home.” Reality: You keep title to your home throughout the life of the loan. The bank holds a mortgage lien (just like with a forward mortgage), but you remain the owner.
• Myth: “I can owe more than my home is worth and my heirs will inherit the debt.” Reality: HECM is a non-recourse loan backed by FHA insurance. Neither you nor your heirs can be required to pay more than the home is worth at repayment.
• Myth: “I lose my home if I move into assisted living.” Reality: The loan only becomes due if you permanently move out (typically defined as 12 consecutive months not living in the home as your primary residence). Temporary stays in hospitals, rehab, or short-term assisted living do not trigger repayment.
• Myth: “Reverse mortgages are taxed as income.” Reality: Proceeds are loan proceeds, not income, and are generally not subject to federal income tax. They may, however, affect Medicaid or SSI eligibility — consult your tax advisor or financial planner.
• Myth: “I cannot leave my home to my children.” Reality: You can. Your heirs can pay off the loan (typically by selling the home or refinancing) and keep any remaining equity, or they can deed the property back to the lender if it does not work out — HECM’s non-recourse protection means they walk away with no further obligation.
• Myth: “Only people in financial trouble use reverse mortgages.” Reality: Modern HECM strategy increasingly includes financial planners using the growing line of credit as a retirement risk-management tool — preserving investment portfolios during market downturns by drawing from the HECM line instead. Used strategically, it can be a planning tool, not just a last resort.

Types of Reverse Mortgages Available in Delaware and Maryland

Most Delaware and Maryland borrowers use one of these reverse mortgage types:

• HECM (Home Equity Conversion Mortgage). The standard FHA-insured reverse mortgage. Most common type by a wide margin and what most Delaware and Maryland 62+ homeowners use.
• HECM for Purchase (H4P). A reverse mortgage used to buy a new primary residence. Lets buyers age 62+ purchase a new home with a significant down payment from their own funds, financing the rest with a HECM that has no required monthly mortgage payment. Common for downsizing or relocating closer to family.
• HECM-to-HECM Refinance. Replacing an existing reverse mortgage with a new one — useful when home values have appreciated, when rates have moved favorably, when you want to add a borrower to the loan, or when you want to adjust the interest rate structure. Whether refinancing makes sense depends on appreciation, rate environment, and program guidelines at the time of refinance. HUD requires a disclosure comparing the benefit to you with the cost, and a refinance must clearly help you; refinancing just to create a new loan (called churning) is not allowed.
• Private (Proprietary) “Jumbo” Reverse Mortgages. Private reverse mortgages that are not FHA-insured. We do not offer them in Delaware or Maryland. See how they differ from a HECM below.
• Single-Purpose Reverse Mortgages. Offered in some areas by state or local agencies or nonprofits for a specific purpose (typically property taxes or home repairs). Limited availability in Delaware and Maryland, and we do not offer them.

Private (Proprietary) Reverse Mortgages vs. the FHA-Insured HECM

Quick Answer: A proprietary reverse mortgage is a private reverse mortgage made by a lender and not insured by FHA. We don’t offer proprietary reverse mortgages in Delaware or Maryland. Our clients in both states use the FHA-insured HECM.

You may see private reverse mortgages advertised online, often called “jumbo” reverse mortgages. Here is how they differ from a HECM, so you know what you are reading about:

Some private programs have no first-year limit, accept condos FHA will not approve, or can pay off other debts at closing. A second-lien version lets a homeowner keep a low-rate first mortgage and add a reverse loan behind it. Terms vary by lender, and each program must be approved state by state.

For Delaware and Maryland homeowners: none of these private programs is available in either state today. If your home is worth more than $1,249,125, a HECM still works; FHA simply counts the value up to the limit. If you are under 62 or want to keep your current mortgage, we can compare a HELOC or a cash-out refinance instead.

HECM for Purchase: Buying a New Home With a Reverse Mortgage

One of the most underused options is HECM for Purchase (H4P) — using a reverse mortgage to buy a new primary residence. This is increasingly common among Delaware and Maryland homeowners who want to downsize, relocate closer to family or grandchildren, or move to a single-story home better suited to aging in place.

Here is how it generally works: you provide a meaningful down payment from your own funds (typically 45% to 65% of the new home’s price, depending on age and current rates), and the HECM finances the rest. There is no required monthly mortgage payment on the HECM portion. You can use proceeds from the sale of your current home, retirement savings, or other liquid assets to fund the down payment.

HECM for Purchase works well when:

• You are 62+ and want to relocate to a different home (downsizing, moving closer to family, moving to a more accessible single-story property)
• You have substantial equity in your current home you can apply to the new home’s down payment
• You want to avoid taking on a new monthly mortgage payment in retirement
• You want to preserve cash and investments for other retirement needs while still buying the right home for the next chapter

The same HUD counseling, financial assessment, and primary residence requirements apply. You must move into the new home within 60 days of closing, so we plan the timeline carefully — coordinating the sale of your current home with the purchase of the new one.

• The down payment must be your own money, such as the sale of your current home or savings, not a new loan.
• Tell your real estate agent early that you are buying with a HECM for Purchase.
• There is no 3-day right of rescission on a purchase.

Why Do Delaware and Maryland Homeowners Use a Reverse Mortgage?

Quick Answer: Most Delaware and Maryland homeowners who use a reverse mortgage fall into one of three groups: those who need cash flow because they are house-rich and cash-poor, those who want more breathing room in retirement, and those planning ahead with a standby line of credit for bad market years.

• Need. House-rich and cash-poor: a tight monthly budget, medical bills, home repairs, or a mortgage payment that is hard to keep up with.
• Lifestyle. Doing fine, but wants more breathing room each month: no mortgage payment, help for family, travel, or a move to a home that fits retirement better.
• Planning. Has savings and investments and wants a standby line of credit to draw on in bad market years, instead of selling investments when prices are down. Often raised by a financial advisor.

When Reverse Mortgage Is NOT a Good Fit

A reverse mortgage solves real problems for some Delaware and Maryland homeowners — but it is the wrong tool in other situations. Here are the scenarios where we typically recommend against a reverse mortgage and point to a better alternative:

If any of these scenarios fit, we say so directly and point you to the right alternative. Education-first means honest answers, even when the honest answer is “this is not the right loan for you.”

Serving Delaware and Maryland Homeowners

John Thomas (NMLS #38783) is a licensed mortgage loan officer based at the office at 248 E Chestnut Hill Rd, Newark, DE 19713, serving Delaware and Maryland homeowners with over 20 years of experience in residential mortgage lending. Reverse mortgages are a specialty area within that practice.

We work with homeowners throughout:

• Delaware: Wilmington, Newark, Bear, Middletown, Hockessin, Pike Creek, Glasgow, New Castle, Dover, Smyrna, Milford, Lewes, Rehoboth Beach, and surrounding communities across New Castle County, Kent County, and Sussex County
• Maryland: Baltimore, Columbia, Silver Spring, Annapolis, Ellicott City, Towson, and surrounding areas across Baltimore County, Howard County, Anne Arundel County, and Montgomery County

Local market knowledge matters more on reverse mortgages than on most loan products. Property values, the FHA appraisal process, county recording, and local title and attorney closing customs all play into the timeline and the math. Working with a loan officer who understands both Delaware and Maryland markets — and who has a physical Newark office you can sit down in — is meaningfully different from a national 800-number reverse mortgage shop.

How to Get a Reverse Mortgage: Step-by-Step

1. Initial consultation. Call John Thomas at 302-703-0727 or schedule online. We discuss your situation, run a preliminary estimate based on your age and home value, and answer your questions. No commitment.
2. HUD-approved counseling. Required by federal law before you can apply. Typically 60 to 90 minutes by phone with a HUD-approved counseling agency. Fee is usually $125 to $200, paid directly to the agency. You receive a counseling certificate that must be submitted with your application.
3. Application. We complete the formal HECM application together. You provide standard documentation (ID, Social Security verification, homeowners insurance declarations, current mortgage statement if applicable, property tax records).
4. FHA appraisal. An FHA-approved appraiser determines your home’s current value. If repairs are required to meet FHA minimum property standards, those need to be completed before closing (or, in some cases, set aside from proceeds).
5. Underwriting and HUD financial assessment. The lender reviews your credit history and income/asset documentation to confirm you can maintain property taxes, homeowners insurance, and home upkeep going forward.
6. Closing. Most HECM loans close within 30 to 60 days from application, depending on appraisal scheduling, counseling completion, and any property or title issues.
7. Funding. After a 3-day right of rescission period (which applies to refinances on a primary residence), funds are disbursed according to your chosen payout structure — lump sum, line of credit, monthly payments, or a combination.

Why Homeowners Trust John Thomas for Reverse Mortgages

John R. Thomas | NMLS #38783 | Branch Manager and Mortgage Loan Officer | John Thomas Team with AnnieMac Home Mortgage

Choosing a reverse mortgage is a major financial decision. You deserve clear guidance from someone who understands both the loan and your long-term financial picture — not a sales pitch.

• 20+ Years of Delaware Mortgage Experience helping homeowners across Delaware and Maryland
• Top 1% of Mortgage Originators Nationwide — Mortgage Executive Magazine
• Top 400 Loan Originators Nationally — National Mortgage News
• Certified Mortgage Planner (CMP) — focused on long-term strategy, not just the next transaction
• Local Newark, DE Office — actual physical location at 248 E Chestnut Hill Rd, not a national 800-number call center
• Specialist in Reverse Mortgages (HECM Loans) — including HECM for Purchase and HECM-to-HECM refinance strategies

Homeowners across Wilmington, Newark, Dover, Baltimore, Columbia, and Silver Spring trust John Thomas for clear, honest reverse mortgage guidance tailored to their situation. Every conversation is education-first — helping you compare your options, understand long-term impact, and make the right decision for your retirement goals. No pressure. No sales tactics. Just clear guidance based on your situation.

---

Ready to Find Out If a Reverse Mortgage Makes Sense for You?

Every situation is different. The only way to know whether a reverse mortgage is right for you is to run the actual numbers based on your age, home value, current rates, retirement goals, and family situation. A no-pressure consultation gives you real answers.

In a 30-minute conversation, we walk through:

• Approximately how much you may be eligible to access based on your age and home value
• How a HECM compares to a HELOC, a cash-out refinance, or selling your home
• What the long-term equity impact looks like for your heirs
• Whether HECM for Purchase might be a better fit if you are considering moving
• What the actual costs look like in dollars, not percentages

Frequently Asked Questions — Reverse Mortgages in Delaware and Maryland

---

© 2026 John R. Thomas, John Thomas Team with AnnieMac Home Mortgage All Rights Reserved. NMLS #38783. Equal Housing Opportunity.

John R. Thomas, NMLS #38783 | John Thomas Team with AnnieMac Home Mortgage | AnnieMac Home Mortgage NMLS #338923 | 248 E Chestnut Hill Rd, Newark, DE 19713 | 302-703-0727 | delawaremortgageloans.net
AnnieMac Home Mortgage is an Equal Housing Lender. State licensing: Look up John R. Thomas, NMLS #38783, on NMLS Consumer Access.
(c) Copyright John R. Thomas, All Rights Reserved.