PORTLAND -- Homeowners interested in converting to a reverse mortgage will face tougher guidelines by the end of the month, and it will make it harder for some to get the loan.

The loans are designed for homeowners at least 62 years old to borrow against the value of their home for retirement.

The loan, plus interest, is paid back when the homeowner dies and the home is sold.

The Federal Housing Administration insures most reverse mortgages, but during the financial crisis, many homeowners withdrew lots of cash on these loans, putting a strain on FHA's reserve funds.

To shore up the program and ensure it will be around for the long term, the department of Housing and Urban Development is implementing new rules.

By the end of September, borrowers will get access to about 15 percent less from the value of their home.

There will be new limits on the amount of money that can be withdrawn in the first year--about 60 percent of the loan.

This will be significant for folks who have existing mortgages that are quite large to pay off and may find that a certain portion of folks won't qualify, said Lynn Wertzler with Reverse Mortgages of Oregon.

The changes are designed to use a reverse mortgage as a financial planning tool rather than for impulse spending.

All FHA insured reverse mortgages require counseling to explain the process clearly.

In January, borrowers will need to prove they have the means to pay property taxes and insurance over the life of the loan.

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