In Minnesota, a reverse mortgage lets you borrow against your home with no monthly loan payments. State law sets 1% as the highest lender service fee. Most people go with a HECM, which is a Home Equity Conversion Mortgage insured by the Federal Housing Administration. Between October 2025 and August 2026, 215 Minnesota homeowners got one of these loans. Of those borrowers, 12 bought a house with their loan.
The 1% service charge cap under Minnesota Statute 47.58
Minnesota Statute 47.58 says your lender can't charge more than 1% of the committed principal amount as a service fee. When a lender agrees to make money available to you, that full total is called the committed principal amount. As you compare loan offers, this state cap lowers the upfront closing costs on a reverse mortgage.
The same law also says when repayment of your reverse mortgage is required after death or after you leave the home. Your loan comes due only if the last surviving borrower dies or no longer lives in the property as a principal residence. Simply put, your principal residence is the main home you live in for most of the year.
The mortgage registry tax in Minnesota: rates of 0.23% and 0.24%
You'll owe the Minnesota mortgage registry tax at closing too, once the county files your loan. When a home loan is put into the public land records, the state charges a fee known as the mortgage registry tax. Minnesota Statute 287.05 says the tax is based on all the payouts you're expected to get from the loan.
In Hennepin and Ramsey counties, the rate is 0.24%. For all remaining Minnesota counties, the rate is 0.23%. With a HECM, your home gets 2 mortgages: a first from a private lender and a second from the federal government. Minnesota taxes only the first mortgage from the private lender on a reverse mortgage, since the federal second mortgage doesn't get taxed.
Are you eligible for the Minnesota Property Tax Deferral for Senior Citizens?
Having a reverse mortgage on your home means you can't sign up for the Property Tax Deferral for Senior Citizens. This rule matters because federal rules in all states require you to pay your homeowners insurance and property taxes. You also have to live in the home as your main residence and maintain it well. If you get behind on your property taxes, your loan could go into default.
Another option is the state tax deferral, but only when you don't have a reverse mortgage. To qualify, your total household income can't be more than $96,000. The property tax you pay will be 3% of your household income from the year before. Your remaining tax bill gets paid by the state of Minnesota as a loan. Get your application in by November 1 if you want to defer property taxes for the next year.
Can you get help from the Minnesota Department of Commerce for a lender dispute?
Yes, you can call 651-539-1600 or 800-657-3602 to get help with a mortgage problem. Complaints about reverse mortgage lending in Minnesota get investigated by the Minnesota Department of Commerce, which also checks whether companies follow the law. The staff works on resolving disputes that come up in the mortgage and real estate industry. In Minnesota, 42 active lenders provide these loans, and the state is home to 8 HUD-approved counseling agencies.
