You’ve owned your property in Fort Lauderdale for a while. Maybe it’s paid off, or close to it. And now, you’re wondering if it’s time that home started paying you back. That’s where a reverse mortgage for rental property comes in. It’s a way to tap into your home equity without selling it or picking up more monthly bills. No extra work. Just access the value you’ve already built.

If you’re living in one of the units of a multifamily property and renting the others, the deal sounds even better. You keep the rental income and get a chunk of cash or a line of credit on top of it.

But here’s the thing: not all rental properties qualify. There are strict rules, and the wrong move can cost you in the long run.

Let’s cut through the noise and lay out what you really need to know, so you can make a smart, confident financial future decision.

General Rules and Reverse Mortgage Residency Requirements

A reverse mortgage is a loan available to homeowners aged 62 and older. Instead of making monthly payments to a lender, you receive funds—either monthly, as a lump sum, or through a line of credit. You don't make loan payments while you live in the residence, but interest accrues over time.

The most common type is the Home Equity Conversion Mortgage (HECM), backed by the U.S. Department of Housing and Urban Development (HUD). It's designed for primary residences only, which is important when considering a reverse mortgage for rental property.

In Fort Lauderdale, house values have seen modest growth. According to Zillow, as of April 2025, the median home sold price was $515,364, reflecting a 2.1% increase from the previous year. This appreciation means many long-time homeowners have accumulated significant equity. A reverse mortgage loan could be a way to access that equity without selling or moving out.

Here are the requirements to qualify and borrow money from a reverse mortgage:

You need to be 62 or older
The home must be your primary residence
You must either own it outright or have a low mortgage balance
You’re still responsible for property taxes, insurance, and maintenance

If you move out permanently or the borrower dies, the loan comes due. In most cases, the entire balance is repaid by selling the property. If there’s anything left over, it goes to your estate or your family members.

General rules, but they matter. Miss any of them, and the whole deal falls apart.

Can You Use It on a Rental Property?

Reverse mortgages are for primary residences only. But there’s one big exception: 2 to 4-unit multifamily properties.

If you live in one of the units and rent out the others, you might qualify. So if you own a duplex, triplex, or fourplex in Fort Lauderdale and actually live there, you’re in what HUD calls an “acceptable rental situation.”

This is the only scenario where a reverse mortgage for a rental property is allowed under current rules. You still need to meet the other factors—age, equity, and reverse mortgage residency rules—but this setup is fair game. And yes, you can still collect rent from the other units.

If you want to know more about renting out a property, here are some important lessons first-time landlords must know.

Benefits of Using a Reverse Mortgage for a Multifamily Property

If your situation checks the boxes, a reverse mortgage for rental property could be a smart move. Here’s why:

Cash from the loan proceeds + rental income
Stay in your home while tapping into your considerable equity
No fixed monthly payments
No need to sell or refinance

In Fort Lauderdale, where rent has risen nearly 3% year-over-year, that extra cash flow can make a big difference in your retirement plans. It’s a way to access your home equity without giving up your home or your income stream.

Risks and Considerations

It’s not all smooth sailing. There are some important risks to keep in mind:

High fees and closing costs
Your debt increases as time goes on
Heirs may need to sell the home to settle the loan
If you stop paying taxes, insurance, or move out, you could face foreclosure

While a reverse mortgage for rental property can help unlock equity and boost cash flow now, it could reduce your estate’s value later. It’s crucial to balance the immediate benefits with the long-term effects, especially if you plan to leave other assets to your family members or may need long-term medical care in the future.

Reverse Mortgage vs. Other Financing: Are There Better Options?

It all comes down to your situation. Here are a few alternatives to consider:

Home equity loan – lower fees, but requires monthly payments
Cash-out refinance – Lender offers more money upfront, but comes with monthly payments
Sell and downsize – no debt, full access to your equity
Rent out the whole place and move into something cheaper

While a reverse mortgage for rental property might offer the right mix of equity access and flexibility, each option has its pros and cons. It’s worth talking to reverse mortgage lenders or a financial advisor before making a decision.

Discover if a Reverse Mortgage Fits Your Rental Strategy with Pristine!

Thinking about using reverse mortgage funds on your multifamily property? It’s a smart way to tap into your property’s value without having to move, but managing rental units while handling the paperwork and rules of a reverse mortgage can get complicated. That’s where we come in.

Pristine Property Management LLC helps Fort Lauderdale homeowners like you keep things running smoothly. If you’re considering a reverse mortgage and want to focus on enjoying the benefits without the hassle of day-to-day management, we’ve got you covered. Here’s how we can make your life easier:

Market and rent units to find the right tenants
Screen tenants to avoid any headaches later on
Handle repairs and rent collection so you don’t have to
Keep you compliant with local rules so you stay on the right side of things

A reverse mortgage might not be for everyone, but if you meet the qualifications and want to unlock both rental income and home equity, it could be the right path. If you’ve got questions or need help figuring it out, we’re here to talk it through with you.

Pristine Property Management LLC Send us a message on our Fort Lauderdale Property Management page today to learn how we can help you make the most of your property!

FAQs

Are There Income or Credit Score Requirements?

No, reverse mortgages don’t have income or credit score requirements. However, you must demonstrate the financial ability to cover ongoing property costs, such as taxes, insurance, and maintenance. Reverse mortgage lenders will assess your ability to manage these expenses to ensure you can maintain the property.

What Happens if I Move Out or Pass Away?

If you move out permanently or the borrower dies, the reverse mortgage becomes due. The loan is typically repaid by selling the property. If there are remaining family members, they can choose to pay off the loan and keep the property, but this requires sufficient funds or financing.

What Are the Fees Associated with a Reverse Mortgage?

Reverse mortgages typically have higher upfront costs than traditional mortgages. These may include origination fees, closing costs, and mortgage insurance premiums. It’s essential to weigh these costs against the benefits of the loan before moving forward.

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