For many Americans, buying a home is about more than just having a roof over their heads—it’s a milestone of financial stability, personal achievement, and a sense of belonging within a community. But let’s face it, homeownership isn’t without its hurdles. From securing your dream home to maintaining and adapting it over time, there are plenty of challenges along the way.
But above all else, homeownership represents an opportunity—a chance to build financial security, achieve personal goals, and create a lasting place to create cherished memories. But this opportunity should be available to everyone, free from barriers or discrimination. That’s the principle at the heart of Fair Housing Month, celebrated every April.
The observance celebrates the Fair Housing Act, a landmark law passed on April 11, 1968, in the wake of Dr. Martin Luther King, Jr.’s assassination. 1 Signed by President Lyndon B. Johnson, the act prohibits discrimination in housing based on race, religion, gender, or other aspects of identity. It establishes fair practices in buying, selling, and financing homes, ensuring that everyone has an equal shot at achieving homeownership.
Fair Housing Month not only highlights the progress made toward housing equality but also underscores the critical role of homeownership in building financial stability. Today, home equity represents a key source of wealth for many families, making it more important than ever to protect fair and equitable access to home financing solutions. More on that later!
Protecting your Right to Fair Housing
Understanding your housing rights and staying informed are essential steps in protecting yourself and your family against potentially harmful practices. Staying informed also opens the door to discovering beneficial grants or opportunities that may be available to you.
One valuable resource is the Office of Fair Housing and Equal Opportunity (FHEO) within the U.S. Department of Housing and Urban Development (HUD).3 The FHEO acts as the chief policymaker and enforcer of federal fair housing regulations. A few of their responsibilities include investigating fair housing complaints, conducting compliance reviews, ensuring civil rights in HUD programs, and managing fair housing grants.3
Though the FHEO operates on a national level, they provide guidance for finding relevant local assistance and offer ways to address personal questions or complaints. Additionally, connecting with trusted financial or housing professionals can be invaluable if you believe you’re facing discriminatory practices in securing home financing.
Understanding the Power of Home Equity
Positioning yourself to achieve your housing goals is vital for creating the life you envision for yourself and your family. For seniors, this takes on an even greater significance, as homeownership often holds the key to unlocking financial stability. Accessing the wealth tied up in a home, also known as home equity, can be an essential step in achieving greater financial security. While this opportunity is valuable for homeowners of all ages, it is particularly impactful for older Americans. According to data from the Federal Reserve, baby boomers collectively hold a whopping $17 trillion in home equity, which equates to roughly half of the nation’s housing wealth.2 Cha-ching!
Facing Retirement Realities
While the wealth seniors have stored in their homes is staggering, it is far from evenly distributed and often remains out of reach—even for those with sizable real estate investments. This disparity can present a serious challenge for seniors in need of liquidity throughout retirement.
If you’re facing limited liquidity or insufficient retirement savings, you’re not alone. In fact, despite baby boomers reporting the need for an estimated $1.1 million in savings for a comfortable retirement, a study from Natixis Investment Managers revealed the median retirement savings among this cohort stands far below this number, at $120,000.4 Even more concerning, according to Credit Karma, around 20% of those over age 59 don’t have a retirement account—the highest share of any generation.4
Understandably, inadequate savings can influence decision making, leading some older adults to remain in the workforce longer than planned or adapt to tighter budgets than anticipated. Given these realities, the ability to access home equity as a senior becomes an essential strategy for establishing a stronger financial footing in retirement.
Considering the Full Picture
Older adults face a multitude of challenges when it comes to housing. Perhaps chief among them is affordability: recent years of home appreciation have driven up the cost of buying a home considerably.2 In addition to this, other expenses can quickly add up. For older adults planning to age in place, this may include making home upgrades to accommodate mobility or safety needs—or perhaps covering in-home healthcare services. These costs, combined with routine home maintenance and everyday living expenses, can place a considerable strain on finances.
Of course, housing decisions aren’t purely financial. Retirees must also consider personal factors as they plan for the future. Maintaining close relationships with family and friends, staying engaged in the local community, managing healthcare needs, and pursuing hobbies or life goals all contribute to overall wellbeing. Crafting a retirement plan that balances financial security with personal priorities is key to building a fulfilling lifestyle. And above all, you deserve peace of mind as you navigate these decisions.
Bridging the Gap
For many older adults, one effective way to access home equity is through a Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage. This type of loan, specifically designed for seniors aged 62 and older, allows you to convert a portion of your home equity into cash. One standout feature of a reverse mortgage is the flexibility in qualification requirements compared to traditional mortgages. While traditional loans heavily weigh factors such as credit score, income, and debt-to-income ratio, reverse mortgages focus more on your age, the equity in your home, and your ability to maintain mandatory property-related expenses like taxes, insurance, and upkeep. This flexibility makes reverse mortgages a more accessible option for many seniors.
Another key benefit? Monthly mortgage payments are not required.5 Instead, the loan provides income tax-free6 funds, which you can access in various forms based on your needs—whether as a lump sum, monthly payments, or a line of credit.7 This flexibility empowers you to use the funds however you see fit, whether for healthcare costs, home improvements, emergency savings, or everyday expenses.
Reverse mortgages are designed to ease the financial burdens that often accompany retirement, offering a powerful tool for enhancing your financial flexibility. Here at Longbridge, we’re committed to helping you responsibly leverage your home equity to help alleviate these burdens and increase your financial flexibility. But above all, we’re dedicated to following fair housing practices and providing equitable service to all our customers. With so much at stake, it’s important to ensure your access to these options is free from discriminatory practices.
Curious about your home equity options? Contact the Longbridge team today to explore the possibilities.
