The least expensive reverse mortgages are the ones offered by state or local governments. But these "public sector" loans generally can be used for only a specific purpose, like home repairs. Many are only available to persons with low to moderate incomes. But the low cost can make these loans very attractive.
Energy Efficiency and Weatherization
Remodeling projects or home maintenance projects of significant sizes, such as major plumbing upgrades, or energy efficient window replacement or a new roof, can warrant using equity in your home. These major home renovations can improve the quality of life for a senior at the same time they reduce monthly energy bills and improve the value of the home.
Deferred Payment Loans (DPLs)
Many local and some state government agencies offer "deferred payment loans" (DPLs) for repairing or improving your home. This type of reverse mortgage gives you a one-time, lump sum advance. No repayment is required for as long as you live in your home.
Property Tax Deferral (PTD)
Some state and local government agencies offer "property tax deferral" (PTD) loans. This type of public sector reverse mortgage generally provides annual loan advances that can be used only to pay your property taxes. No repayment is required for as long as you live in your home.
According to a 2007 AARP study, some type of PTD program is available in parts or all of the following states: Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, North Dakota, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming, and the District of Columbia.
AARP does not endorse any reverse mortgage lender or product -- so do your homework and ask a trusted financal advisor for help in analyzing your situation and the reverse mortgages available to you.
Read more at AARP about Low-Cost Public Loans