Good

• Simple to qualify
• Money received is not taxable
• Eliminates the existing mortgage on the home
• The homeowner can stay in the home permanently
• No monthly payments need to be repaid as long as the homeowner lives in the home
• The estate will never owe more than the home’s value
• The estate inherits the home and keep the remaining equity after the balance is paid off
• Interest rate is lower than traditional mortgages and home equity loans

Bad

• Medicaid and other needs based government assistance programs can be affected if too much money is withdrawn within a few months
• The fees are the same as a traditional FHA mortgage but are higher than a traditional mortgage because of insurance costs
• The program is not well understood