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Home Equity Conversion Mortgage

HomeSafe Second: A Second-Lien Reverse Mortgage That Puts You First

For many older homeowners, tapping into home equity through a reverse mortgage can be a smart way to enhance retirement income, manage rising costs, or simply enjoy greater financial peace of mind—without giving up the home they love.

Traditional reverse mortgages typically require paying off your existing mortgage using the loan proceeds. But what if you’re benefiting from a low-rate first mortgage that you’d prefer to keep?

Enter HomeSafe Second.
This innovative second-lien reverse mortgage allows you to access a lump sum of cash from your home’s equity—without refinancing or disrupting your existing mortgage. It’s a flexible solution designed to work alongside your current loan, helping you preserve what’s working while gaining the financial freedom you need.

What Is HomeSafe Second?

HomeSafe Second: Unlock Equity Without Refinancing Your First Mortgage

HomeSafe Second is a second-lien reverse mortgage designed to sit behind your existing mortgage or Home Equity Line of Credit (HELOC). It allows you to access a portion of your home’s equity without refinancing your current first mortgage or taking on a new monthly mortgage payment.

You’ll still be responsible for property taxes, homeowners insurance, and any payments on your existing mortgage—but you won’t have to alter your current loan terms.

As a smart alternative to a HELOC or traditional home equity loan, HomeSafe Second gives you the flexibility to maintain your low-rate mortgage while putting your equity to work—offering a cash flow-friendly way to boost retirement income or cover rising expenses.

Key Benefits of HomeSafe Second:

Unlock Equity Without Refinancing

With HomeSafe Second, you can access a lump sum of cash from your home’s equity—without refinancing your existing low-rate mortgage or adding a new monthly mortgage payment.* This second-lien reverse mortgage lets you preserve favorable loan terms while gaining extra financial flexibility.

*Borrower must live in the home, maintain it, and pay critical property charges like taxes and insurance.

Repayment on Your Terms

While HomeSafe Second must eventually be repaid with interest and fees, you won’t need to make monthly payments as long as you meet the loan obligations. Repayment is deferred until you move out of the home or pass away, giving you greater freedom to manage cash flow and protect your retirement savings.

General Requirements: 

  • Be 55+ (60+ in WA, 62+ in TX)

  • Own a home in an eligible state (AZ, CA, CO, CT, FL, MT, NV, OR, SC, TX, UT, WA)

  • Meet minimum credit and income requirements

  • Have an existing first mortgage in good standing

  • Attend an approved financial counseling session to help you determine if the loan is a good fit

Common Uses of HomeSafe Second

  • Consolidate High-Interest Debt

  • Manage Everyday Expenses

  • Cover Medical and Long-Term Care (LTC) Needs

  • Upgrade Your Home for Comfort and Safety

  • Enhance Your Lifestyle

Built-In Non-Recourse Protection

When the loan becomes due, it’s typically repaid through the sale of the home. Thanks to the loan’s non-recourse feature, if the sale doesn’t cover the full loan balance, neither you nor your heirs will be responsible for the shortfall.

Eligible Properties:

  • Single-Family Homes

  • Planned Unit Developments (PUDs)

  • Condos and Townhomes

  • 2-4 Unit Properties

NOTE: Manufactured homes and modular properties do not qualify

How does HomeSafe Second compare to a HELOC?

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*This is an educational example of one HELOC. Requirements, payment, and other terms may vary between lenders.

  • What is the interest rate on a HECM loan?
    Reverse mortgage interest rates can vary by lender and whether you select a fixed or variable product. The variable interest rate is composed of two parts: an index and a lender margin (both are stated in the mortgage contract). Fairway uses the weekly average of the Constant Maturity Treasury (CMT) as the index. To find out what the current reverse mortgage interest rates are, please reach out to Fairway retirement mortgage specialist.
  • What is the interest rate on a HECM loan?
    Reverse mortgage interest rates can vary by lender and whether you select a fixed or variable product. The variable interest rate is composed of two parts: an index and a lender margin (both are stated in the mortgage contract). Fairway uses the weekly average of the Constant Maturity Treasury (CMT) as the index. To find out what the current reverse mortgage interest rates are, please reach out to Fairway retirement mortgage specialist.
  • Who qualifies for a HECM?
    To qualify for a Home Equity Conversion Mortgage (HECM), you must: Be 62 or older Own your own home (must be an eligible property type) and reside in it as your primary residence Own the home outright or have significant equity in the home Meet minimal income and credit requirements Attend a financial counseling session
  • What are the pros and cons of a HECM?
    The pros of a Home Equity Conversion Mortgage (HECM): You can convert a portion of your home’s equity into cash, fixed monthly advances, or a growing line of credit (growth applies to the unused funds). You are not obligated to make a monthly mortgage payment — although you can — for as long as you meet the loan terms. Those terms include living in the home as your primary residence and paying the property-related taxes, insurance, and upkeep expenses. The cons of a HECM: The unpaid reverse mortgage loan balance grows over time. This is because interest and fees get tacked on the unpaid loan balance. Note: You do have the option to pay down the loan balance at any time — you can pay as much or as little toward it as you would like. You are drawing down on your home equity. Naturally, that likely means your heirs would have less money (or no money at all) coming to them from that particular asset.
  • Is a HECM a second mortgage?
    No. A Home Equity Conversion Mortgage (or HECM, commonly called a reverse mortgage) must be in the first lien position. The good news is the loan proceeds can be used at closing to pay off (refinance) an existing first or second mortgage as long as the lien(s) meets the seasoning guidelines (liens that have been in place longer than 12 months or resulted in less than $500 cash to the borrower. An exception now exists for some HELOCs).
  • How is a HECM repaid?
    When a maturity event occurs (e.g., the home is no longer the primary residence of the at least one borrower or a non-borrowing spouse), the loan becomes due and payable, and the home is typically sold to repay any outstanding loan balance. Because reverse mortgages are non-recourse loans, the sale of the home after loan maturity will always satisfy the loan repayment obligation — neither the borrower nor their heirs will be personally liable for any balance deficiency.
  • Can I buy a flipped home with a HECM for Purchase loan?
    The sales contract must be signed more than 90 days from the seller’s purchase of the property.
  • Is there a Mortgage Insurance Premium (MIP)?
    With a HECM for Purchase, you will be required to pay upfront and ongoing mortgage insurance premiums. These premiums are usually financed into the loan and not paid out of pocket – their purpose is to fund the non-recourse feature, which protects you or your heirs from being stuck with a bill if your loan balance is higher than what your home sells for when the loan matures and is due and payable.
  • I want to buy a new construction home — can I start the application before the home is completed?
    Yes. You can complete the HECM for Purchase application and begin the process of securing the loan, but the appraisal, and consequently the loan closing, cannot happen until the Certificate of Occupancy has been issued.
  • What source of funds (money) are allowed when you purchase a home with a HECM for Purchase loan?
    The money must come for your liquid assets (e.g., bank accounts, CDs, retirement accounts) or from the documented sale of other assets you may have (your present home for example).
  • Why is my down payment higher with an H4P loan compared to a conventional mortgage?
    Your down payment is higher initially because you will not be required to make monthly mortgage payments (except for property-related taxes and insurance). With a traditional mortgage, you could potentially lose more in cash flow over the years because of the consistently required payments.

**This does not constitute tax or financial advice from Fairway. Please consult a tax professional or financial advisor regarding your specific situation.

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The HomeSafe reverse mortgage is a proprietary product of Finance of America Reverse LLC and is not affiliated with the Home Equity Conversion Mortgage (HECM) program.

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Copyright©2025 Fairway Independent Mortgage Corporation (“Fairway”) NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. The youngest borrower must be at least 62 years old. Monthly reverse mortgage advances may affect eligibility for some other programs. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.

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