By George A. Downey

Reverse mortgages are financial products that enable older homeowners to convert part of their home equity into cash without having to sell their property or make mandatory monthly mortgage payments. In condominium associations, reverse mortgages can play a unique role in maintaining property values and avoiding claims of disparate impact from older residents.
Why it matters
Older condominium owners’ rights are activated if HOA policies or practices unintentionally discriminate against protected groups, which include older residents, under fair housing and consumer protection laws.
Disparate impact claims arise when association rules or lending practices disproportionately affect individuals based on age, race, disability, or other protected characteristics, even if there is no explicit intent to discriminate. For example, some condominium associations have policies or practices that inadvertently disable eligibility for reverse mortgage financing. These policies, while seemingly neutral, can exclude older residents potentially triggering disparate impact claim exposure.
Reduce legal risks and increase value
HOA boards can help mitigate these risks. Facilitating access to reverse mortgages increases the ability for older unit owners to remain in their homes and maintain financial stability. This inclusive approach demonstrates a commitment to fair-housing principles and reduces the likelihood that association policies will be perceived as discriminatory or exclusionary.
Reverse mortgages can enhance financial security for aging owners facing economic challenges, such as rising association fees, property assessments, unexpected expenses, or who just want funds for other purposes. By providing an alternative source of funding, reverse mortgages help residents meet their financial obligations without resorting to selling their units or seeking external assistance. This not only benefits individual homeowners, but also contributes to the overall stability and value of the condominium community.
Enabling reverse mortgages as an option within condominium associations can serve as a proactive measure to offset disparate impact claims.
By fostering greater financial inclusion and supporting residents from various backgrounds, associations can uphold fair housing standards and create a more equitable living environment for all members.
Other considerations for reverse mortgages: Eligibility requirements apply. HECM counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners’ association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance, or maintenance, or otherwise does not comply with the loan terms. 
About the Author: George Downey, CRMP (NMLS ID 10239) is the Regional Senior Vice President of The Federal Savings Bank branch located at 100 Grandview Road, Suite 105, Braintree, MA 02184. Contact Mr. Downey at 781-843-5553 / Cell 617-594-3666 / gdowney@thefederalsavingsbank.com, www.thefederalsavingsbank.com/georgedowney