Reverse Mortgage Loan Blog

DERRY – Reverse mortgage loans will no longer be counted as income for older residents seeking municipal tax breaks, the town’s chief financial officer said yesterday.

Last year, 15 residents 65 or older were denied exemptions because of income; three of them had reverse mortgages, CFO Frank Childs said. Officials changed the policy this month after receiving word that it’s up to individual communities to decide, he said.

Before the policy changed, Childs said, officials had been operating under verbal instruction from the state to count reverse mortgages as income. However, he said, “we didn’t believe before that it should be.”

Members of the Alliance of Derry Taxpayers raised the issue after a man told them his application to receive exemptions was denied because of his reverse mortgage loan. The alliance also successfully pushed to alter exemption qualifications to make more senior citizens eligible.

State Rep. Howie Lund, R-Derry, said he sought clarification on the issue at the state level. In an e-mail to Lund, George Blatsos, commissioner of the New Hampshire Department of Revenue Administration, said reverse mortgages are not considered income. Childs said the town had changed its policy before the e-mail.

“The obligation to repay offsets the benefit of having the loan proceeds,” Blatsos wrote. “The recipient of the loan is in no better financial position than he was before; in fact, he is worse off as interest accrues on the debt.”

Although the issue is resolved in Derry, Lund said, there may be other communities that count reverse mortgages as income. Lund, a member of the taxpayer alliance, said legislation could put communities across the state on the same page.

Doug Newell, director of the taxpayers alliance, said the group considers the policy change a victory. The alliance has sent surveys to elderly residents to see what other kinds of changes they may want.

“I’m 55. I can’t speak for the elderly,” Newell said, adding, “I thought that it might be nice to begin a dialogue with them.”

Newell is running against Nick Arancio and Neil Wetherbee in the race for the District 3 council seat next month.

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