Reverse Mortgages (HECM) in Arkansas

Quick answer: A reverse mortgage lets homeowners age 62 and older convert part of their home equity into cash without a required monthly mortgage payment. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). You keep title and live in the home; the loan is repaid — usually from the home’s sale — when the last borrower sells, moves out permanently, or passes away. You must keep paying property taxes, homeowners insurance, and upkeep. HUD-approved counseling is required before you apply.

What an HECM is

An HECM (Home Equity Conversion Mortgage) is a reverse mortgage insured by the Federal Housing Administration. “Reverse” means the payment direction flips: instead of you paying down a loan each month, the lender advances funds to you against your equity, and the balance grows over time as interest and fees accrue. You remain the owner and stay in your home. The loan comes due only when the last borrower leaves the home for good.

Because it’s FHA-insured, an HECM is non-recourse: neither you nor your heirs will ever owe more than the home is worth when it’s sold to repay the loan, even if the balance has grown past the home’s value.

Who qualifies

• Age 62 or older — every borrower on title must meet the age minimum.
• Primary residence — the home must be where you live most of the year. Eligible property types include most single-family homes, many condos, and 2–4 unit homes where you occupy one unit.
• Sufficient equity — you generally need to own the home outright or have a low remaining balance, which the reverse mortgage pays off at closing.
• Financial assessment — the lender confirms you can keep up with property taxes, insurance, and maintenance. If there’s concern, part of the proceeds may be set aside to cover them.

How much you can borrow

The amount available — the principal limit — depends on the age of the youngest borrower, the home’s value, and expected interest rates. Older borrowers qualify for a larger share of their equity. Home value counts only up to the FHA’s HECM limit; for 2026 the maximum claim amount is $1,249,125. Value above that ceiling doesn’t increase your borrowing power on an HECM.

How you receive the money

Adjustable-rate HECMs offer flexible payout options you can combine:

• Line of credit — draw as needed; the unused portion grows over time, which can make it a powerful standby reserve.
• Tenure — equal monthly payments for as long as you live in the home.
• Term — equal monthly payments for a set number of years.
• Lump sum — a single draw at closing (this is the only option on a fixed-rate HECM).

Many borrowers combine a line of credit with monthly payments to match their cash-flow needs.

HUD-mandated counseling

Before you can apply, HUD requires a session with an independent, HUD-approved counselor. The counselor explains how the loan works, what it costs, how it affects your heirs, and what alternatives exist — with no obligation to proceed. This step exists to protect you, and it’s non-negotiable. Keep the counseling certificate; your lender needs it to move forward.

What it costs

An HECM carries meaningful costs, which is why counseling matters. Expect an upfront FHA mortgage insurance premium, an ongoing annual insurance premium charged on the balance, an origination fee, servicing costs, and standard closing costs (appraisal, title, recording). Most of these can be financed into the loan rather than paid out of pocket, but they add to the balance that grows over time.

Your ongoing obligations

A reverse mortgage removes the required monthly mortgage payment, but not your responsibilities as an owner. You must keep property taxes and homeowners insurance current, pay any HOA dues, and maintain the home in good repair. Falling behind on taxes or insurance is the most common way borrowers get into trouble, because it can trigger a default even with no mortgage payment due. Budget for these before you draw.

Alternatives worth comparing

A reverse mortgage isn’t the only way to use home equity. If you can handle a monthly payment and want to preserve more equity for heirs, a HELOC in Arkansas or a cash-out refinance may cost less over time. Downsizing to a smaller home is another route that frees equity without a reverse mortgage. The right choice depends on your age, your cash-flow needs, and whether staying in this specific home long-term is the goal.

Reverse mortgages in Arkansas

HECMs are available statewide through FHA-approved lenders, and the rules are federal, so an Arkansas borrower follows the same HUD guidelines as anyone else. ARLoanSource is the Little Rock branch (DBA) of Primary Residential Mortgage, Inc., licensed in all 75 Arkansas counties. Because a reverse mortgage is a major, long-term decision that affects your heirs, we walk through it slowly and make sure counseling and the financial assessment are done right. Contact ARLoanSource to talk it through with a licensed originator.

Frequently asked questions

Do I still own my home with a reverse mortgage?

Yes. You keep title and remain the owner. The lender holds a lien, like any mortgage, but you live in the home and control it. The loan is repaid — usually from the home’s sale — only when the last borrower sells, moves out permanently, or passes away.

Will my heirs be responsible for the balance?

Because an HECM is non-recourse, your heirs never owe more than the home is worth. When the loan comes due, they can repay it and keep the home, sell the home and keep any remaining equity, or sign it over to the lender. FHA insurance covers any shortfall if the balance exceeds the sale price.

What’s the minimum age for a reverse mortgage?

62. Every borrower listed on the home’s title must be at least 62 to qualify for an HECM. A younger spouse may be listed as an eligible non-borrowing spouse with certain protections, which your counselor and originator can explain.

Can I lose my home with a reverse mortgage?

You can, if you stop paying property taxes or homeowners insurance, let the home fall into disrepair, or move out permanently. There’s no monthly mortgage payment, but those ownership obligations remain and a lapse can trigger default. Keeping taxes and insurance current is essential.

How much can I get from a reverse mortgage?

It depends on the youngest borrower’s age, your home’s value (up to the 2026 HECM limit of $1,249,125), and expected rates. Older borrowers and higher home values yield more. A licensed originator can run your specific principal limit.

Reviewed by Conan Watters, Licensed Arkansas Originator · NMLS #252910.
ARLoanSource is a DBA of Primary Residential Mortgage, Inc. (Company NMLS #3094, Branch NMLS #252910), licensed in all 75 Arkansas counties. Equal Housing Lender. This is not a commitment to lend. A reverse mortgage is a loan that must eventually be repaid; consult the required HUD counseling and a tax advisor.