If you are a homeowner 62 or older in Farmington, New Mexico, and you have been hearing more about reverse mortgages, you are not alone. Many longtime homeowners in San Juan County have built up real equity in their homes, and the idea of using some of it without selling or taking on a monthly mortgage payment is worth understanding clearly.
I am Ryan Champion, a Certified Reverse Mortgage Specialist (CREV) and Certified Mortgage Advisor (CMA). I am licensed in New Mexico and Colorado, and I work with clients in Farmington, Aztec, Bloomfield, and across the Four Corners from my office in Durango, about an hour up the road. I take an education-first approach, because you deserve honest information before you make any decision. You can read more about my background here.
Here is what you need to know.
What Is a Reverse Mortgage?
A reverse mortgage is a loan for homeowners 62 and older that lets you turn part of your home equity into cash. You keep ownership of the home, and there is no required monthly mortgage payment. You do still pay property taxes, homeowners insurance, any HOA dues, and keep up the home.
The most common type is the Home Equity Conversion Mortgage, or HECM, which is insured by the Federal Housing Administration (FHA). HUD sets one national HECM lending limit, so a Farmington home has the same limit as a home anywhere else in the country. For higher-value homes, there are also private (proprietary) reverse mortgages. Proprietary reverse mortgages can also allow younger borrowers (55+)
The loan becomes due when the last borrower sells the home, moves out permanently, or passes away. At that point, the loan is repaid, usually from the sale of the home or by heirs who refinance to keep it. Any remaining equity belongs to you or your heirs.
How Farmington Homeowners Use Reverse Mortgages
Eliminating a monthly mortgage payment. If you still have a mortgage, a reverse mortgage can pay it off. The payment you were making every month stays in your pocket, and for many retirees that alone changes the picture.
Supplementing retirement income. You can take the money as a line of credit, monthly payments, a lump sum, or a combination. The line of credit is especially flexible: the unused portion grows over time, and as long as you meet the loan terms, it cannot be frozen or reduced the way a bank can freeze a HELOC.
A financial safety net. Some homeowners open a reverse mortgage line of credit early in retirement and leave it alone, simply so it is there if they need it. Because the unused line grows, waiting to use it can mean having more available later.
Delaying Social Security. Some retirees use a reverse mortgage to cover living expenses in their 60s so they can delay Social Security and lock in a larger monthly benefit. This is a strategy worth talking through with a financial planner alongside your mortgage options.
New Mexico Property Tax Help for Seniors
Because reverse mortgage borrowers must keep paying property taxes, it is worth knowing about New Mexico's valuation freeze. Homeowners 65 or older (or disabled) whose household income is under the state limit can apply to freeze their home's assessed value, so it does not keep rising each year. For the 2026 tax year, the limit was a modified gross income of $44,200, and it is adjusted each year for inflation.
The freeze locks in your home's value, not your tax bill, so your taxes can still change if tax rates change. It must be applied for through the San Juan County Assessor, so check with their office for this year's deadline and paperwork.
Common Questions from Farmington Homeowners
Do I still own my home?
Yes. Your name stays on the title. The lender records a lien, just like a regular mortgage, but you keep ownership. As long as you live there, pay your property taxes and insurance, and maintain the home, you can stay as long as you like.
What if I live longer than expected?
That is fine. A reverse mortgage has no set term. It does not come due because of your age or how long you have had it, only when the last borrower moves out, sells, or passes away, or if the loan terms are not met.
What happens to my family when I pass away?
Your heirs inherit the home along with the loan, and they have options. They can sell the home, repay the loan, and keep any remaining equity. They can keep the home by paying off the loan, often by refinancing into their own name. With a HECM, if the balance is higher than the home's value, they can keep it by paying 95% of the appraised value. If no one wants the home, they can sign it over to the lender. HECMs are non-recourse, so your heirs never owe more than the home is worth. I cover the timelines and each option in my guide to paying back a reverse mortgage.
What if my spouse is younger than 62?
A younger spouse can often be listed on a HECM as an eligible non-borrowing spouse. If certain conditions are met, that spouse can stay in the home after the borrower passes away. Planning for this up front matters, so bring it up early.
Will it affect my Social Security or Medicare?
Reverse mortgage proceeds are loan money, not income, so they generally do not affect Social Security or Medicare. Needs-based benefits like Medicaid and SSI are different, since money you keep in the bank can count against their limits. If you receive those benefits, talk with a benefits counselor before you decide how to take your funds.
Can I be forced out of my home?
Not as long as the home is your primary residence and you keep up with property taxes, insurance, and maintenance. Falling behind on those obligations is what can cause problems, which is why I look at them carefully with every client.
Is a reverse mortgage right for me?
That depends on your situation. I cannot answer it without knowing your goals, your finances, and what you hope to accomplish. What I can promise is a clear, honest picture of both the benefits and the trade-offs, so you can decide for yourself. No pressure, no obligation.
Who Is a Good Candidate?
A reverse mortgage tends to make the most sense when:
- You plan to stay in your home for the long term
- You have significant equity built up
- You want to eliminate a monthly mortgage payment or add to your retirement income
- Leaving the home free and clear to your heirs is not your top priority
It tends to make less sense when:
- You expect to move within a few years
- Your equity is limited
- You would struggle to keep up with property taxes, insurance, and upkeep
- You want to pass the home to your children without a loan against it
Every HECM also includes a financial assessment, where the lender reviews your income, credit, and bill-paying history to make sure you can keep up with taxes and insurance. If there are concerns, the loan may set aside part of your funds to cover those costs. That is not a penalty. It is a protection that helps you stay in your home.
These are generalizations. A conversation about your situation will tell you more than any checklist.
The Required HECM Counseling Session
Before a HECM can move forward, HUD requires you to meet with an independent, HUD-approved housing counselor. I do not do this session. It is a separate conversation with a third party who has no financial stake in your decision. You can find an approved counselor through HUD at 1-800-569-4287.
I think this requirement is a good thing. It is one more layer of protection to make sure you have everything you need to decide, and I will help you schedule it when the time comes.
Serving Farmington and the Four Corners
I work with homeowners in Farmington, Aztec, Bloomfield, and throughout San Juan County, as well as Durango and Southwest Colorado. Being based in Durango means I am close enough to meet in person when that matters, and easy to reach by phone or text when that is more convenient.
If you would like a no-pressure conversation about whether a reverse mortgage fits your situation, I would be glad to talk. Call or text me at (970) 403-5677.
Reverse mortgages are loans that must be repaid. Borrowers must occupy the home as their primary residence and remain current on property taxes, homeowners insurance, HOA dues (if applicable), and home maintenance. Failure to meet these obligations may cause the loan to become due and payable or result in foreclosure. These materials are not from, nor approved by, HUD, FHA, or any government agency. This article is for educational purposes and is not legal or tax advice.