The most commonly-used type of reverse mortgage is known as a

• A. Reverse annuity mortgage
• B. Home equity conversion mortgage
• C. Fixed-rate reverse mortgage
• D. Equity loan

Answer: (B)

A reverse mortgage lets homeowners aged 62 or older convert home equity into cash while staying in the home. The Home Equity Conversion Mortgage, or HECM, is the FHA-insured program from HUD/FHA and is by far the most widely used form. Its popularity comes from federal insurance that protects both borrower and lender, mandatory counseling to ensure understanding, standardized fees and terms, and broad lender participation. It also offers flexible payout options—monthly payments, a line of credit, a lump sum, or a combination—making it suitable for many financial situations. Other terms exist but are not as common: the reverse annuity mortgage is an older label no longer prevalent in modern lending, the fixed-rate variant is just one option within the HECM family and is less common overall, and an equity loan isn’t a reverse mortgage at all.