Because the proceeds are a tax-free loan, there is no effect on Social Security or Medicare benefits. However, income-based programs may view the HECM as an addition cash flow source. Therefore, it is always best to consult an advisor when receiving benefits from an income-based program before pursuing the HECM.
The loan amount of the HECM is based on the age of the youngest borrower, the home value, and current interest rates. Borrowers must attend HUD-certified counseling prior to applying for a HECM loan