No. You stay the owner and can remain in the home as long as the occupancy, maintenance, tax, and insurance obligations are met.

What happens to the inheritance?

Heirs can sell and keep the remaining equity, or refinance and keep the home. HECM is non-recourse, so the debt cannot exceed the home's value at settlement.

Yes. HECM loans are FHA-insured, and independent HUD-approved counselling is required before closing. That counselling is not a formality — it exists because the product is easy to structure badly.

Reverse Mortgage in Chicago, IL: HECM Basics

What a HECM does

A Home Equity Conversion Mortgage is an FHA-insured loan for homeowners 62 and older. You keep the title and take equity as a lump sum, a line of credit, monthly payments or a mix. You must live in the home, maintain it, and keep taxes and insurance current, or the loan can come due.

The Chicago tax piece

The median Chicago owner paid $5,152 in property taxes in 2024, per the Census ACS. On a reverse mortgage you pay that yourself every year. Check your bill on the Treasurer site and your assessment on the Assessor site so you know the number you are committing to.

For scale, the 2024 median Chicago home value was $341,200. How much a HECM pays out depends on your age, your home's value and current rates, so we run your own numbers.

Chicago reverse mortgage questions

Can I get a reverse mortgage on my Chicago two-flat?: HECMs can be used on two-to-four-unit homes if you live in one unit. Rent from the other unit does not change that requirement.
What happens to my Chicago home when I pass?: Heirs can sell and keep any equity left or pay off the loan to keep the house. A HECM is non-recourse, so the debt cannot exceed the home's value at sale.
Do I still need homeowners insurance on a paid-off Chicago bungalow?: Yes. With a HECM, insurance and taxes are your responsibility, and letting either lapse is a default.

See the Chicago overview for other loans in the city.

Sources

The three questions everybody asks

Do I lose the home?: No. You stay the owner and can remain in the home as long as the occupancy, maintenance, tax, and insurance obligations are met.
What happens to the inheritance?: Heirs can sell and keep the remaining equity, or refinance and keep the home. HECM is non-recourse, so the debt cannot exceed the home's value at settlement.
Is it regulated?: Yes. HECM loans are FHA-insured, and independent HUD-approved counselling is required before closing. That counselling is not a formality — it exists because the product is easy to structure badly.

What it costs

A HECM carries an upfront mortgage insurance premium, an annual premium on the outstanding balance, origination and closing costs, and a servicing structure. The balance grows over time rather than amortising down. That is the mechanism, not a catch — but it means the cost of holding one for twenty years is a very different number from the cost of holding one for five.

Considering a reverse mortgage in Chicago?

You get the mechanics, the cost over your expected time horizon, and the alternatives — downsizing, a HELOC, a standard refinance — compared side by side. HUD counselling comes before closing regardless. There is no reason to rush this.

Get a second opinion

Reverse mortgage in other markets

A reverse mortgage is a loan against your home and must be repaid. Borrowers remain responsible for property taxes, homeowners insurance, and maintenance. Independent HUD-approved counselling is required before closing. Nothing here is a rate quote, an offer, or a commitment to lend.