Reverse mortgage loan. Whether seeking money to pay for medical treatment, finance a home improvement, buy long-term care insurance, or supplement income, many older Americans are turning to a "reverse mortgage."  A reverse mortgage allows older consumers to convert the equity in their homes to cash while retaining home ownership.

With a regular mortgage loan, you make monthly payments to the lender. But with a reverse mortgage, you receive money from the lender and generally do not have to repay it for as long as you live in your home. In return, the lender holds some ? if not most or all ? of your home's equity.

Introduced in the late 1980s, reverse mortgages can help homeowners who are "house-rich-but-cash-poor" remain in their homes and still meet their financial obligations. The proceeds of the loan are tax-free, there are no minimum income requirements, and for most reverse mortgages, the money can be used for any purpose.

If you're considering a reverse mortgage, it's important to understand how the loans work and what your rights and responsibilities are.

Types of reverse mortgage loans:

• the federally insured Home Equity Conversion Mortgage (HECM), administered by the Department of Housing and Urban Development (HUD)

• single-purpose reverse mortgages, usually offered by state or local government agencies for a specific reason

• proprietary reverse mortgages, offered by banks, mortgage companies, and other private lenders and backed by the companies that develop them.

To qualify for a reverse mortgage, you must be at least 62 and have paid off all or most of your home mortgage. Income is generally not a factor, and no medical tests or medical histories are required. If you seek an HECM, you also must undergo free mortgage counseling from an independent government-approved "housing agency." Financial institutions offering proprietary reverse mortgages may require similar counseling or homeowner education.

The amount you can borrow depends on your age, the equity in your home, the value of your home, and the interest rate. If it's an HECM, federal law limits the maximum amount that can be paid out.

You can be paid in a lump sum, in monthly advances, through a line of credit, or a combination of all three.