The typical reverse mortgage Indiana seniors take out pays $119,805 on a $275,000 house, turning home value into cash. The option most people choose is a HECM, short for Home Equity Conversion Mortgage. As long as you live in the home, you don't owe monthly loan payments. Indiana's median initial principal limit sits at $119,805. Your principal limit is the initial sum you're able to borrow, and it depends on your age, rate and home value. These loans were closed by 343 Indiana homeowners in fiscal year 2025. Understanding the basics of a reverse mortgage helps you judge whether it suits your budget.
For seniors, Marion County offers a $150 property tax credit and a 2% cap.
Federal rules for reverse mortgages require that you keep paying homeowners insurance and property taxes. The house must be your main home, and you're also required to keep it in good shape. If you fall behind on property taxes, your loan could go into default. Default means breaking the loan agreement, and the lender can then demand repayment and foreclose. Since property taxes don't stop, local relief programs help keep your home safe.
In Indianapolis, the Marion County property tax credit for people over 65 takes $150 off if you are 65 or older, or a surviving spouse. If you file as a single person, your prior-year adjusted gross income can't be more than $60,000. Your adjusted gross income equals your total yearly income minus certain federal tax deductions. A $70,000 cap based on the prior year applies to joint filers and all shared owners.
Marion County also offers a circuit breaker credit for people over 65, which limits your yearly property tax rise to 2%. Your application must be in by January 15 of the year the taxes become due and payable. Because Marion County sets these rules, reach out to your county auditor to check on credits for other Indiana counties.
The Unified Tax Credit for the Elderly and Indiana's $1,000 income tax exemption
Your property tax bill isn't lowered by state income tax breaks, but they provide savings to help pay taxes and insurance. On your state income tax return, you can get a $1,000 exemption from the Indiana Department of Revenue if you or your spouse are at least 65. You could be eligible for the Unified Tax Credit for the Elderly too. By the close of the tax year, you or your spouse need to be 65 or older to claim the credit. You'll find the reverse mortgage rules easier to meet each year by keeping that extra cash.
What does the Indiana Homeowner Protection Unit do when you complain about a lender?
Indiana has 45 active reverse mortgage lenders, and you can compare their offers; state law also controls how they deal with you. The Indiana Attorney General's Homeowner Protection Unit, part of the Consumer Protection Division, looks into deceptive mortgage lending practices. When a lender deceives you or breaks state or federal laws, you can file a complaint with this office.
After it examines a case, the unit may refer it to licensing boards or law enforcement. It can also file civil suits over violations of Indiana's consumer protection laws covering mortgage and real estate deals. The unit represents the state, so it can't serve as your personal attorney.
