Are the expenses of an eligible Non-Borrowing Spouse or Other Non-Borrowing Household Member included in the Home Equity Conversion Mortgage (HECM) analysis?

Mortgagees (Lenders) must analyze a Non-Borrowing Spouse’s and Other Non-Borrowing Household Member’s obligations from the sources specified in Section 3.76 of the HECM Financial Assessment and Property Charge Guide only if the:
  • Non-Borrowing Spouse’s income is used as a compensating factor or to reduce family size; or
  • Other Non-Borrowing Household Member's income is used to reduce family size.
The Non-Borrowing Spouse’s expenses and the Other Non-Borrowing Household Member's expenses must meet the same documentation and verification standards as required for the borrower’s expenses.
For additional information see Mortgagee Letter 2016-10 and the attached revised HECM Financial Assessment and Property Charge Guide, Section 3.96 and 3.97 at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02885