Why Rural Seniors Are Least Likely to Use Reverse Mortgages

People living in rural communities aren’t always able to share in the same services as their more community-based counterparts in urban and suburban areas. And for seniors with substantial home equity, many do not have access to options that could help them leverage their housing wealth, according to a recent report from the Urban Institute.

There is a vital need in the U.S. to expand equity release options and incentives for older homeowners, particularly those who own their homes and could benefit from tapping into their home equity to help them age in place, says the Urban Institute report “The Future of Rural Housing” released this month.

“Rural seniors who own their homes free and clear and those whose mortgages are mostly paid off could rely on their home equity to pay for a more comfortable retirement,” the report states. “But options for doing so are still too limited, and few seniors take advantage of them.”


As the U.S. senior population ages, the projected share of older households in rural America is growing and will pose several challenges for the families and the communities in which they live.

One of these challenges will be the cost burdens of being able to afford health care, transportation costs and maintaining one’s home later in life, especially during a time when homeowners age 60 and older are nearing retirement and are seeing their wage and salary employment come to an end.

“Even if they own their homes free and clear, they will have ongoing housing costs,” the Urban Institute states. “To offset declining incomes, seniors need creative solutions reflecting three main housing situations.”

These situations include developing a new understanding of why seniors do not use equity tapping options that are currently available to them, as well as examining new ways to help rural seniors who might have little to no home equity, and improving options for rural senior renters.

“Rural senior homeowners with little or negative home equity are in a uniquely vulnerable position,” the Urban Institute states. “They may not be able to move to improve their housing situations, and their lack of resources may lead them to defer maintenance of homes whose value presumably is already low.”

As for renters living in rural areas—whose numbers the Urban Institute projects will increase significantly—they are vulnerable to rising rents and may, like low-equity homeowners, have few choices but to tolerate old or poorly maintained residences.

The reality is that most homes in the U.S. were not built to accommodate aging needs such as mobility limitations, hearing or vision loss, or memory impairments—all conditions that are likely to increase as people grow older.

Home renovations are a logical solution to address these issues. But while some rural seniors might have sufficient resources to pay for these modifications themselves, others could potentially benefit from unlocking their housing wealth to help foot the bill.

“Seniors whose homes are still in good shape and whose mobility is not impaired would also benefit from a wider array of programs and incentives to tap into home equity; these initiatives could connect seniors with incentives to update, improve, and maintain properties,” the Urban Institute states.

Read the full Urban Institute report here.

Written by Jason Oliva

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  • Finally a report that is not centered on a product but on a prevailing condition of a significant and growing sector of the senior population. The report ignores homeownership as to defining the problem which is a better way to examine the problem.

    We need a much answer to human needs than equity release. Equity release is greatly limited and while effective for some, it cannot begin to meet the needs to the vast majority who need help. Even MIT concluded in its research that only about 12% of seniors maximally can be helped by reverse mortgages.

    Several of us rebut the complaints of those who say PLFs are too low and now the emphasis on providing real liquidity relief is going away from those for whom it was intended with the cry that FHA must protect the MMI Fund. Those who cry out for ineligible senior homeowners are not wrong that there is a need; they are wrong for insisting that the answer should be found in HECMs. The problem is much larger and a mortgage program is not the complete answer, although in some circumstances it can provide partial relief for a period of time.

    So far neither the Keynesian nor monetary policies instituted by the Obama Administration have created the relief needed for those who are near retirement. Well paying jobs were needed starting in 2009 but the jobs provided through the policies of President Obama over the last eight years have generally not met that criteria. It is hard to say what policies would have other than those available through the addition of massive debt without much prospect of recapturing the increased debt through federal income taxes and the “economic multiplier effect.”

    We need better answers. $19 trillion in federal debt and interest payments on that debt soon becoming the 3rd highest cost in entitlements within the budget say so.

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