Can You Get a HELOC With a Reverse Mortgage? Rules and Regulations

Last updated: June 2025

As homeowners approach or enter retirement, many look to their home equity as a valuable financial resource. Two common tools used to access this equity are home equity lines of credit (HELOCs) and reverse mortgages. 

Both products allow homeowners to tap into the value of their property, but they serve different financial purposes and follow different sets of rules.

Can you get a HELOC with a reverse mortgage? The answer, while nuanced, is generally no. Below, we’ll explain why, what the regulations say, and what options remain available for homeowners who may want to access additional funds.

What is a reverse mortgage?

A reverse mortgage, sometimes called a Home Equity Conversion Mortgage, or “HECM,” when the FHA insures it. Homeowners aged 62 or older can use different types of reverse mortgages to borrow money based on the value of their primary residence.

Rather than making monthly payments to a lender, the borrower receives payments from the lender. The loan is generally settled once the homeowner moves out for good, sells the home, or passes away.

They’re frequently useful for retirees who want to supplement fixed income, fund aging-in-place renovations, or avoid selling their homes.

What is a HELOC?

A HELOC is a revolving line of credit secured by home equity. The HELOC functions much like a credit card, allowing homeowners to draw funds as needed over a 5- to 10-year period, during which they make interest-only payments. 

Afterward, the repayment period begins, where the principal and interest are due.

Unlike reverse mortgages, HELOCs require:

• Proof of income and creditworthiness
• Monthly repayment on borrowed funds
• Home equity reserves after draw amounts
• Clear title and lien position

They’re commonly used for renovations, debt consolidation, or funding large expenses.

Can you get a HELOC with a reverse mortgage?

The short answer is no, not under FHA reverse mortgage guidelines.

HECMs, the most common type of reverse mortgage, do not allow subordinate liens—including HELOCs—on the property. 

The FHA enforces this restriction to protect the integrity of the reverse mortgage program, which is designed to be the only lien on the home.

Here’s why:

1. A reverse mortgage uses the home’s equity as collateral for the loan.
2. Adding a HELOC would create a second lien, putting the HELOC lender in a junior position.
3. FHA rules prohibit additional encumbrances to avoid jeopardizing repayment of the reverse mortgage.

Attempting to take out a HELOC on a home with an active reverse mortgage can place the borrower in default, triggering early repayment or foreclosure.

Why reverse mortgages block additional HELOCs

Reverse mortgages are intended to provide homeowners with maximum access to equity while minimizing risk. 

To maintain the security of the FHA-insured loan, the program requires that:

• No additional liens are recorded against the property
• The reverse mortgage must be in the first and only lien position
• Borrowers agree not to take out any new home equity debt

This rule protects the borrower by ensuring they won’t be burdened with repayment on other loans while also safeguarding the lender’s collateral interest.

Can you get a reverse mortgage after using a HELOC?

Yes, but with conditions.

If you already have a HELOC in place, you must pay it off completely before being eligible for a reverse mortgage. 

In many cases, reverse mortgage proceeds can be used for this purpose as part of the closing process.

Here’s how it typically works:

1. Homeowner applies for a reverse mortgage
2. The reverse mortgage lender requests a payoff of the existing HELOC
3. Upon closing, the HELOC is paid off and closed
4. The reverse mortgage becomes the only lien on the property

Until the HELOC is fully cleared, a reverse mortgage—especially a HECM—cannot be approved.

What are the alternatives to a HELOC if you have a reverse mortgage?

If you currently hold a reverse mortgage and need more funds, you still have options:

• Refinance the reverse mortgage: If your home has appreciated or you’re eligible for improved loan terms, a refinance may increase your available funds.
• Request a credit line increase: Some reverse mortgage agreements allow for line-of-credit growth over time.
• Access community or state assistance programs: Depending on your state, local programs may offer senior financial support.
• Sell the home and downsize: This can free up equity while maintaining financial flexibility.
• Explore alternative financing options for another property: If you own a second home or rental property, a HELOC or home equity loan on that asset may be an option.

Always review these alternatives with a qualified mortgage or financial advisor to make certain they align with your long-term goals and obligations.

Real-world scenario: What happens if you try to combine them?

Hypothetical example: James, a 76-year-old homeowner in Colorado, already has a reverse mortgage on his home but wants to install a walk-in tub and make safety upgrades. 

A contractor suggests taking out a HELOC, but James’ daughter, acting as his financial power of attorney, checks with the reverse mortgage servicer and discovers that any new lien would violate the loan terms. 

They instead explore refinancing the reverse mortgage to unlock additional funds, preserving both James’ home and his loan compliance.

Understand the restrictions before combining products

If you’re wondering, can you get a HELOC with a reverse mortgage? Under most lending regulations, the answer is no. Reverse mortgages are structured to use your home’s equity as a sole resource, meaning no additional loans, like HELOCs, are permitted.

That said, there are responsible ways to manage your equity and secure additional funds if needed. Reverse mortgage refinances, increased credit lines, or selling and downsizing can all provide alternatives without violating program rules.

Before making any decisions, consult with a mortgage professional familiar with home equity products and reverse mortgage regulations.

Need guidance on your home equity options?

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