AARP assesses the aging in place role for reverse mortgages

Influential senior interest group AARP has released one new report assessing the prospects for aging in the US, finding that despite seniors’ overwhelming desire to remain in their own homes as they age, there is much policy work to be done nationally and within individual communities to better address these preferences to vote.

The organization’s 2024 National Home and Community Preferences Survey shows that a strong majority (75%) of adults age 50 or older want to remain in their current home as they age, while 73% hope to at least to continue living in their own home. communities. This finding is much higher than in adults between the ages of 18 and 49 (60% and 63%, respectively).

“However, existing housing policies and community infrastructure are not keeping pace with this increasing need,” the organization said. There could also be a role for reverse mortgages, according to a senior AARP leader, but the focus on older people with more limited financial resources is the north star for AARP, she said.

The necessity of aging in place

“Aging is universal, but where and how we age should be something we can control,” Deb Whitman, AARP’s EVP and Chief Public Policy Officer, said on a call with reporters this week. “And in this age when approximately 10,000 people in America turn 65 every day, we need to find ways to make it easier to age in place.”

However, existing housing policies and infrastructure in communities have not kept pace with this preference, and older adults face significant barriers to aging that community leaders and lawmakers must address to accommodate these desires, the organization said .

“Most older adults want to remain in their homes, but rising housing costs and limited options create serious barriers,” said Rodney Harrell, AARP VP of Family, Home and Community. “To meet this growing need, leaders at all levels and sectors must prioritize affordable, safe and accessible housing and communities.”

According to facts by Harvard UniversityAccording to the Joint Center for Housing Studies (JCHS), seniors spent more than 30% of their income on housing, yet federal housing assistance reached only 36.5% of eligible households. Four major barriers to aging have been identified by AARP, including affordability; accessibility; barriers to integrating more technology into everyday life; and a lack of community resources and willingness to address these challenges.

“Nearly half (44%) of adults aged 50 and over expect to move, with housing costs a primary driver, including rising costs for rent or mortgage (71%), home maintenance (60%) and taxes (55% ),” the findings said. “More than half (51%) of adults age 50 and older say they need a home that supports independent aging. Nearly half anticipate the need for home modifications to support this, such as handles (72%), entrance improvements (71%) and kitchen upgrades (39%).”

A role for reverse mortgages?

At the request of HousingWire‘s Reverse Mortgage Daily (RMD) on the role reverse mortgages could play in addressing some of these concerns, says Jenn Jones – vice president of government affairs for AARP and former chief of staff at the U.S. Department of Housing and Urban Development (HUD) and former head of membership and policy at the National Coalition for Community Reinvestment (NCRC) — explained that the program has improved.

“As someone who comes from HUD, I know a little about HECMs,” Jones began. “The program is certainly stronger than before. The increase in asset limits is really aimed at people with significant equity in their home, giving them the opportunity to take out a reverse mortgage to have some extra money for their retirement.”

But those who qualify for reverse mortgages may also have a less urgent need compared to those who cannot draw on home equity to meet the challenges outlined in the report. The FHA recently increased the 2025 HECM limit to more than $1.2 million.

“My focus has always been on people who don’t have a lot of equity in their home and are looking for different options to finance improvements, home modifications or other similar things,” she said. “I’m not sure AARP has a position on HUD’s latest action, as it targets people with large amounts of equity in their homes.”

She added that she is “a little less concerned about their ability to manage a reverse mortgage than I am about middle-income and working-class people who are trying to figure out how to make all these modifications to their home to fit into their to continue living in your own home. homes and continue to live in their communities.”

AARP also recently highlighted reverse mortgages in an information video, providing perspectives on the details of the loan and what it means for older people considering entering the sector.

Potential actions

There are five key proposals that AARP recommends as possible solutions to meet the increasing need for aging expansion. The first focuses on expanding affordable housing programs, including programs that expand rental subsidies and encourage investments in the preservation and construction of affordable housing.

Section 8 Housing Choice Vouchers are one such program the organization mentioned, as well as bipartisan legislative efforts like that of Sen. Maria Cantwell (D-Wash.)Affordable Housing Loan Improvement Act‘, which held hearings in the Senate Banking Committee early this year.

The organization also recommends removing barriers to the construction of additional housing, an increasingly popular option that some states have aggressively pursued to address housing shortages, and which could uniquely meet the needs of older adults.

Zoning was also mentioned as a barrier that could be addressed, and some states and localities have taken steps to create more inclusive zoning policies, but have also been met with community opposition.

In addition, making communities more walkable and broadband internet services more affordable and available was another priority.