Former HUD Secretary: Aging Wave is Coming, Reverse Mortgages Can Help

With the droves of older Americans who are going to be living in their homes for the duration of their retirement years, housing options and services are going to have to adapt to meet those needs. This is the finding of a recent book edited by former Housing Secretary Henry Cisneros; by and large, the book finds, Americans will age in place. 

When asked whether a reverse mortgage fits into the aging in place model, Cisneros told RMD it is part of the conversation and will be a valuable tool for some. 

“It is a legitimate device to provide access to capital that people have built up in their homes,” he said. “It makes that available to them at a time in their life when they want to remain at home but need some more capital to help meet daily expenses.” 

The topic came up during the research for the book, Independent for Life: Homes and Neighborhoods for an Aging America. Finding that a mere 5% of older Americans will live in nursing homes or assisted living communities, there will be a strong push for services that allow people to remain at home. 

“[A reverse mortgage] is an instrument that can be very creatively used by families to their benefit,” he said, noting that many families today have children who have relocated and have no interest in inheriting their childhood home. However, they are not without some caution, he says. 

“One has to be very careful of abuses, whether the interest rates or the treatment of the person staying in the home. The person taking out the reverse mortgage and/or family caregivers need to be very attentive.”

Given the 6 million people today who are over 85 years old that will soon grow to 20 million in that age group, the product will become more popular, Cisneros said. 

“Based on the sheer mathematics of it, one would expect more people could avail themselves of these instruments, but a second mitigating factor is that a lot of people may not be comfortable with the products. Then there have been a lot of financial abuses having to do with the housing downturn. It is up to the industry to present it as a user-friendly, prudent and responsible way to proceed.” 

Now serving as executive chairman of CityView, Cisneros says there are several important considerations for the aging population to be able to age in place: home modifications and adaptations; new home construction; existing communities and public facilities and services. 

“We believe that only about 5% of Americans will be at a nursing home or an assisted living facility at any time,” he says. “The vast majority will live on their own. For some—most—it means a home they own.”

Written by Elizabeth Ecker

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