Hand in Hand Co-ops & Reverse Mortgages

Some co-op boards and their attorneys are reluctant to allow their tenant-shareholders to obtain reverse mortgages. They tend to apply a forward mortgage criteria and a forward mortgage mindset to such a request - but this type of thinking I believe simply isn't appropriate.

Before I debunk the usual proffered arguments, I first want to focus upon the fact that as the years go by, more and more seniors will seek reverse mortgages. For an individual who has already decided that they wish to remain in their home or co-op unit, a reverse mortgage may become a necessity. It may be the only way that a senior at least 62 years of age will be permitted to convert a portion of their equity into cash without selling - and without making monthly mortgage payments.

An Aging Population

Consider some of the tough realities. In 1900, one in 25 people were at least 65 years of age. Today one in eight have reached this milestone. In July of 1983, a startling thing occurred: For the first time in the history of the country, the number of people 65 and over was greater than the number of teenagers. By the year 2050 there will be twice as many people in this category than teenagers.

And consider this: Both the birth rate and death rate are down. Twenty percent of the baby boomers had no children, and 25 percent had one child. For the past 30-plus years, the birth rate couldn't surpass the death rate.

Adding to that, according to the last census, there are 35 million people in this country who have reached their 65th birthday. This number will double by the year 2030. Today this country has more people 65 or over than the entire population of Canada. Currently, no state has a senior population that exceeds 20 percent of its overall population - but in 20 years, it is estimated that 30 states will have a senior population that exceeds this amount.


Related Articles

Refinancing Your Underlying Permanent Mortgage Like a Banker

Borrowers Should Think About All Options When Refinancing UPMs.

Q&A: Privatizing a Mitchell-Lama Co-op

Q&A: Privatizing a Mitchell-Lama Co-op

Paying off Underlying Mortgages

The Pros & Cons

Paying off Underlying Mortgages

The Pros & Cons

Reversing the Trend

Reverse Mortgages for Co-ops?

Underlying Mortgage Refi

The Challenges of Financing in Small Co-ops and Condos



  • I live in a very strict co-op. I doubt that I wil be able to get a reverse mortage even though my is fully paid for. I certainly do not want to move nor would I be able to pay interest on a loan as I have no income other that social security. My apartment is worth about $900,000. Is it a useless asset?
  • When will reverse mortgages be available to coop owners in New Jersey?