How Does a Reverse Mortgage in Myrtle Beach Actually Work?

A reverse mortgage in Myrtle Beach gets sold to retirees more aggressively than almost any other loan product, and most of what gets said about it is either oversold or flatly wrong. So here’s the plain version.

A Home Equity Conversion Mortgage, or HECM, is an FHA-insured loan that lets a homeowner 62 or older convert part of their equity into cash without a monthly principal and interest payment. It is a loan, not a benefit and not a grant. The balance grows with interest and fees instead of shrinking, and it gets repaid eventually. Understand that and the rest of this makes sense.

Who can get a reverse mortgage?

The rules live in 24 CFR Part 206, under Section 255 of the National Housing Act.

The youngest borrower has to be 62 or older at closing. The property has to be the principal residence of each borrower at closing, and of an eligible non-borrowing spouse if there is one. You have to hold title to the entire property, and any existing mortgage or lien gets paid off at closing, usually out of the HECM proceeds. You also can’t be delinquent on federal debt.

That last title requirement is the real gate. People hear you must own the home free and clear. What the regulation actually requires is that no other lien survives closing, which means the HECM has to be large enough to retire whatever you still owe. If it isn’t, you bring the difference or the loan doesn’t work.

Do you have to get counseling first?

Yes, and it has to come from someone who isn’t me.

Under 24 CFR 206.41, the lender gives you a list of HUD-approved HECM counselors at first contact, and you, any non-borrowing spouse and any non-borrowing owner all have to be counseled. The counselor issues a certificate, and you hand that certificate to the lender before the loan proceeds. No certificate, no loan.

This is a consumer protection, not a formality. The counseling session covers what happens to a surviving spouse, what your ongoing obligations are, and what alternatives exist. Find a counselor through the HUD housing counseling search at answers.hud.gov or call 800-569-4287. HUD also puts it bluntly on its own site: watch out for anyone charging thousands of dollars for information HUD gives away.

What does the lender check before approving one?

Since April 27, 2015, every HECM goes through a Financial Assessment under 24 CFR 206.37(b). The underwriter looks at two things: your credit history, to judge willingness to meet obligations, and your cash flow and residual income, to judge capacity.

If that assessment raises concerns, the lender can require a Life Expectancy Set-Aside, or LESA. A LESA holds back part of the loan proceeds to cover property taxes and hazard and flood insurance. It can be fully funded, where the lender pays those charges directly before they go delinquent, or partially funded on an adjustable-rate HECM, where you get semi-annual disbursements. LESA funds aren’t held in an escrow account, and whether you get one is the lender’s underwriting decision, not something you opt into.

On the Grand Strand a LESA is worth wanting rather than dreading. It’s the mechanism that keeps the exact bills most likely to end a reverse mortgage here from going unpaid.

What makes a reverse mortgage come due?

This is the section to read twice, because it’s where reverse mortgages actually fail.

Under 24 CFR 206.27, the loan becomes due and payable, with HUD approval, if the property stops being your principal residence for any reason other than death, if you fail to occupy it for more than 12 consecutive months because of physical or mental illness, if you don’t provide for the payment of property charges, or if any other obligation under the mortgage goes unperformed. You also have to keep the property insured against hazards and keep it in good repair.

Property charges are defined in 24 CFR 206.205: property taxes including special assessments, hazard insurance and flood insurance. Ground rent, condominium fees, planned unit development fees and homeowners association fees are always your responsibility and can never be covered by a LESA.

Here’s why that hits harder here than in the middle of the state. If the home is in a FEMA Special Flood Hazard Area, 24 CFR 206.45(c) requires flood insurance maintained for the entire term of the mortgage. Not at closing. The entire term. Coastal wind and flood premiums move, and they move upward, and a fixed retirement income doesn’t. A retiree in Garden City or Cherry Grove who lets a wind and hail policy lapse to save money has just triggered a due-and-payable condition on their home. Get a real quote on the specific address from Integrated Insurance Solutions and build the number into the plan, not around it.

Property taxes deserve the same attention. In South Carolina the owner-occupied assessment ratio isn’t automatic, and the 4% legal residence exemption in Horry County has to be filed for. If you never filed, you’re paying the higher ratio, and that is money coming straight out of a reverse mortgage budget every year.

What happens to the balance and to your heirs?

The loan is non-recourse. Under 24 CFR 206.27(b)(8), the borrower has no personal liability for the outstanding balance, and the lender is not permitted to obtain a deficiency judgment. The statute at 12 U.S.C. 1715z-20(d)(7) says the same thing.

Say that precisely rather than the way it usually gets said. It doesn’t mean nobody ever owes anything. It means no one comes after you or your estate for a shortfall between what’s owed and what the sale brings. Your heirs inherit a decision, not a debt: sell the home and keep whatever is left over after the balance is paid, refinance it into their own loan, or hand it back. What they don’t inherit is a bill.

What protects a spouse who isn’t on the loan?

A Deferral Period, under 24 CFR 206.55, and it only works if you set it up correctly at application.

If the last surviving borrower dies and there’s an Eligible Non-Borrowing Spouse, the due-and-payable status is deferred and that spouse can stay in the home. To be eligible, the spouse had to be identified truthfully at application, has to have stayed married to the borrower, has to keep the property as their principal residence, and has to establish legal ownership or another ongoing legal right to remain within 90 days of the borrower’s death. All the borrower obligations keep running: taxes, insurance, maintenance.

If the spouse is an Ineligible Non-Borrowing Spouse, there’s no deferral, and the loan becomes due and payable when the last surviving borrower dies. That distinction is set at the beginning, not at the end. If one spouse is under 62 and you’re thinking about a HECM, this is the single most important conversation to have before you sign anything.

Can you buy a house with a reverse mortgage?

You can. It’s called a HECM for Purchase, and it does the whole thing in one transaction instead of buying with cash and then refinancing.

You have to occupy the property within 60 days of closing, per 24 CFR 206.39(b). You bring a required monetary investment at closing, and HUD is specific about where it can come from. Under Mortgagee Letter 2024-06, effective for case numbers assigned on or after April 29, 2024, acceptable sources are cash on hand, cash from the sale or liquidation of your assets, HECM proceeds, interested party contributions, gifts from family members, and a real estate commission where you’re the licensed agent on the deal. Interested parties, meaning the seller and others with a stake in the transaction, may contribute up to 6 percent of the sales price toward closing costs and prepaid items. Lenders and third-party originators may not contribute at all.

Sweat equity, trade equity, rent credit and premium pricing are all prohibited as funding sources. Discount points and interest rate buydowns aren’t permitted either.

One number worth knowing: for calendar year 2026, the HECM maximum claim amount is $1,249,125, set by Mortgagee Letter 2025-22 dated December 11, 2025, for case numbers assigned on or after January 1, 2026. It’s a single national figure, not a county-by-county limit, so Horry and Georgetown counties use the same number as everywhere else. FHA republishes it each December.

What I’d actually do

One thing before anything else: write down what the property costs you every year with nobody making a mortgage payment. Taxes at the ratio you’re actually assessed at, wind and hail, flood if you’re in a zone, association dues, and honest maintenance on a coastal house. That annual number is the test. A HECM makes a retirement plan work when that number is comfortably covered for the long run, and it quietly makes things worse when it isn’t.

Bring me that number and the address. I’ll walk you through how a reverse mortgage works against your actual situation, and I’ll tell you plainly if selling, downsizing or a different loan is the better answer. Sometimes it is. Contact me and we’ll go through it.

Frequently asked questions

What is the minimum age for a reverse mortgage?

The youngest borrower has to be 62 years of age or older at the time of loan closing, under 24 CFR 206.33. If one spouse is younger, they may still be protected as an eligible non-borrowing spouse, but they cannot be a borrower.

Is HECM counseling required before getting a reverse mortgage?

Yes. Under 24 CFR 206.41, the borrower, any non-borrowing spouse and any non-borrowing owner must receive counseling from a HUD-approved counselor, who issues a certificate that has to be provided to the lender. You can find a counselor through the HUD housing counseling search at answers.hud.gov or by calling 800-569-4287.

What can cause a reverse mortgage to become due and payable?

Under 24 CFR 206.27, the loan can become due if the property stops being your principal residence, if you fail to occupy it for more than 12 consecutive months due to physical or mental illness, if you do not provide for payment of property charges such as taxes and hazard and flood insurance, or if another obligation under the mortgage goes unperformed. HUD approval is required before the lender may call the loan due.

Will my heirs owe money if the loan balance is more than the home sells for?

No. A HECM is non-recourse. Under 24 CFR 206.27(b)(8) the borrower has no personal liability for the outstanding loan balance and the lender is not permitted to obtain a deficiency judgment. Heirs can sell the home and keep any remaining equity, refinance it into their own loan, or turn the property over.

What is the HECM loan limit for 2026?

The HECM maximum claim amount for the period January 1, 2026 through December 31, 2026 is $1,249,125, set by Mortgagee Letter 2025-22 dated December 11, 2025. It is a single national figure rather than a county limit, so it is the same in Horry and Georgetown counties as anywhere else. FHA republishes the figure each December.

About Travis Buis

Travis Buis is a loan officer with Elite Home Lending serving Myrtle Beach and the Grand Strand, working with buyers and homeowners across Horry and Georgetown counties. A retirement market brings its own set of financing questions, and he spends a fair amount of his week on them: reverse mortgages and their ongoing obligations, downsizing, coastal insurance and property tax treatment, and whether staying put or moving actually makes better sense. He explains the mechanics first so you can decide, then handles the loan once you have. Get in touch.

Travis Buis, NMLS #1711446. Elite Home Lending, LLC — NMLS #2788023. Equal Housing Opportunity.

This article is for educational purposes only and is not a commitment to lend or an offer of credit. Program terms, rates, and eligibility standards are set by lenders, investors, and agencies and are subject to change without notice. Loan approval is subject to underwriting, credit approval, and property eligibility. Calculator results are estimates only. Nothing here is tax or legal advice — consult your CPA or attorney for your situation.