Question 1

Does a reverse mortgage affect my Social Security or Medicare?

Accepted Answer

No. Social Security retirement benefits and Medicare are not based on your assets, and reverse mortgage proceeds are a loan advance, not income — so neither is reduced. Some homeowners even use the proceeds to delay claiming Social Security for a larger benefit.

Question 2

Could it affect my SSI or Medi-Cal?

Accepted Answer

These are different from Social Security and Medicare: SSI is needs-based with a federal resource limit ($2,000 individual / $3,000 couple) — proceeds you keep past the month received can count, so timing matters. Medi-Cal: California removed its asset test on January 1, 2024, so retained proceeds generally no longer affect asset-based eligibility. If you receive SSI or any needs-based benefit, talk to a benefits specialist before drawing a large lump sum.

Question 3

How can I take reverse mortgage money without losing my SSI?

Accepted Answer

It comes down to timing and how you take the funds: Money you receive and spend within the same calendar month is generally not counted as a resource. Money you still hold into the next month can push you over the $2,000 / $3,000 SSI limit. An undrawn line of credit is usually not a counted resource, so drawing smaller amounts as you need them is often safer than a single large lump sum. Plan the timing with a benefits specialist before you draw — the rules are strict and the stakes are high. This same-month timing is the single most important thing for anyone on SSI to get right.

Question 4

Are reverse mortgage proceeds taxable income?

Accepted Answer

Generally no — because the money is a loan advance, not income. Interest is generally not deductible until it is actually paid, usually at repayment. Your situation is personal, so confirm with your own CPA or tax advisor.

Question 5

Do I still have to pay property taxes?

Accepted Answer

Yes. With any reverse mortgage you remain responsible for property taxes, homeowner's insurance, and upkeep — keeping them current is part of staying in good standing. California's Proposition 19 and Property Tax Postponement program may offer relief for those who qualify.