Starting in January, lenders will be required to make sure that borrowers will be able to make their required tax and insurance payments over the life of the loan, by examining all sources of income and credit history. To qualify for a full loan, homeowners must have a certain level of monthly income left over after paying all expenses, including taxes and insurance. For a single homeowner, this threshold level ranges from $529 to $589, depending on the region in which he lives. If the borrower falls short of this amount, he will be required to make a cash set-aside, which will either be deducted from payments or charged to a line of credit.

All these changes should be viewed as positive. The limit on first-year withdrawals will reduce the likelihood that borrowers will spend their money and be left without a buffer to allow for future needs. The financial assessment will ensure that the people taking out a reverse mortgage will not be forced into bankruptcy by failing to pay taxes and insurance. Consolidating the standard and the saver will make the program easier to understand. A better customer experience combined with slightly higher fees and slightly lower loan amounts will also take pressure off the insurance fund.

We need this program to work well, because people are going to need the money.