Yes, a retired person can get a mortgage. Lenders cannot legally treat retirees differently for no longer drawing a paycheck, and underwriters routinely qualify borrowers on Social Security, pensions, annuities, retirement account withdrawals, and even untouched account balances. What matters is showing enough stable, documentable income (or convertible assets) to cover the monthly payment alongside your other debts.
Retirement Income That Counts Toward Qualification
Social Security is the most common substitute for wages, and underwriters verify it through a benefit verification letter you can download instantly from your my Social Security account at ssa.gov.1Social Security Administration. How Can I Get a Benefit Verification Letter? Because Social Security is federally backed and inflation-adjusted, lenders treat it as highly reliable income.
Monthly pension payments from former employers, unions, or government retirement systems carry similar weight. Annuity distributions also count, but the lender must confirm the payments will continue for at least three years from the date of the mortgage note.2Fannie Mae. Annuity, Pension, or Retirement Income The same three-year continuance rule applies to any distribution drawn from a retirement account. If your annuity or scheduled distributions run out sooner, they won’t count.
Veterans receiving VA disability compensation or Dependency and Indemnity Compensation can include those payments too. A VA disability award letter or Certificate of Eligibility confirms the amount, and borrowers receiving VA compensation for a service-connected disability are exempt from the VA funding fee on a VA home loan.3Veterans Benefits Administration. VA Home Loan Guaranty Buyer’s Guide
Turning Savings Into Qualifying Income
If you have a substantial 401(k), IRA, or brokerage balance but don’t take regular withdrawals, you can still use those assets to qualify through an “asset depletion” calculation. The lender converts a lump sum into a hypothetical monthly income figure, and the math depends on which guidelines govern your loan.
Fannie Mae starts with the net documented value of eligible assets and divides by 360 months (or the actual remaining loan term, whichever applies).4Fannie Mae. Other Sources of Income Freddie Mac uses a shorter 240-month divisor, producing a higher monthly figure from the same pool.5Freddie Mac. Assets as a Basis for Repayment of Obligations For assets held in stocks, bonds, or mutual funds, only 70% of the current value is counted to cushion against market swings.6Genworth Mortgage Insurance. Assets as a Basis for Repayment of Mortgage Obligations
A rough example under Fannie Mae’s approach: a retiree with $1,000,000 in a stock-heavy IRA uses 70% ($700,000), divided by 360, for roughly $1,944 in monthly qualifying income. Under Freddie Mac’s formula, the same balance yields about $2,917. Neither figure represents actual withdrawals. It’s just the number the lender plugs into your debt-to-income calculation.
The accounts must be fully vested and accessible without early-withdrawal penalties. Most retirees are past 59½, so the 10% early distribution tax no longer applies and that requirement is met automatically.7Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions If you’re still working in semi-retirement and your 401(k) sits with your current employer, the lender may question whether you have unrestricted access; a prior employer’s plan or a rollover IRA is cleaner.
Credit Scores and Debt-to-Income Ratios Still Apply
Retirement status changes nothing about credit standards. The same score thresholds and debt ratios apply to you as to any other borrower.
Credit Score Thresholds
For conventional loans backed by Fannie Mae, there’s no longer a fixed minimum credit score cutoff. As of late 2025, Fannie Mae shifted to letting its automated underwriting system (Desktop Underwriter) evaluate each applicant individually rather than imposing a blanket 620 floor. In practice, most lenders still set their own minimums in the 620–640 range as an internal risk overlay, so approval below that neighborhood is rare. Scores above 740 consistently unlock the lowest interest rates.
FHA loans are more forgiving. A score of 580 or above qualifies you for the minimum 3.5% down payment; scores between 500 and 579 require 10% down. That wider range makes FHA financing worth considering if your credit has taken a hit.
Debt-to-Income Ratios
Your debt-to-income ratio (DTI) measures what percentage of your gross monthly income goes toward debt payments, including the proposed mortgage. For manually underwritten conventional loans, Fannie Mae caps DTI at 36%, rising to 45% with strong credit scores and adequate cash reserves. Loans run through Fannie Mae’s automated system can reach 50% DTI.8Fannie Mae. Debt-to-Income Ratios
For retirees, DTI is where the math often gets tight. Your income side includes everything discussed above (Social Security, pensions, annuities, asset depletion figures), and the debt side includes credit card minimums, car payments, student loans, and the new mortgage payment with principal, interest, taxes, insurance, and any HOA fees. Paying off a car loan or credit card balance before you apply can meaningfully widen the gap.
Loan Programs That Fit Retirees
The right product depends on your credit profile, assets, and whether you’ve served in the military.
- Conventional loans backed by Fannie Mae or Freddie Mac typically require the highest credit scores but offer competitive rates and flexible terms. Down payments start at 3–5% for primary residences, though putting down 20% eliminates private mortgage insurance.
- FHA loans, insured by the Federal Housing Administration, accept lower credit scores and require as little as 3.5% down. The trade-off is mandatory mortgage insurance for the life of the loan if you put down less than 10%.
- VA loans are available to eligible veterans, active-duty service members, and surviving spouses. No down payment, no private mortgage insurance, and no VA-set minimum credit score, though lenders impose their own. Borrowers receiving VA disability compensation are exempt from the funding fee.3Veterans Benefits Administration. VA Home Loan Guaranty Buyer’s Guide
Each program has its own guidelines for retirement income and asset depletion, so the same financial profile might qualify under one program and fall short under another. If a conventional loan doesn’t work, FHA or VA may still be open.
Reverse Mortgages as an Alternative
If you already own a home and want to tap equity rather than take on a monthly payment, a Home Equity Conversion Mortgage (HECM) runs in the opposite direction. The lender pays you (as a lump sum, a line of credit, or monthly installments) and the loan balance grows over time until you sell, move out, or pass away.
HECMs are available only to homeowners aged 62 or older.9Consumer Financial Protection Bureau. Can Anyone Take Out a Reverse Mortgage Loan? The property must be your primary residence. The amount you can borrow depends on your age (younger borrowers get less), current interest rates, and the appraised value, subject to a 2026 nationwide maximum claim amount of $1,249,125.10U.S. Department of Housing and Urban Development. FHA Lenders Single Family You can also use a HECM to purchase a new primary residence if you cover the gap between the loan proceeds and the purchase price with your own funds.11U.S. Department of Housing and Urban Development. HUD FHA Reverse Mortgage for Seniors (HECM)
Before closing, HUD requires a counseling session with an approved third-party counselor who walks you through financial implications, alternatives, effects on your estate, and impact on government benefits eligibility. The resulting certificate is valid for 180 days.12U.S. Department of Housing and Urban Development. Certificate of HECM Counseling The catch: you must keep paying property taxes and homeowner’s insurance. Fall behind on either, and the loan can become due. Your heirs also inherit a smaller estate, because the balance plus accumulated interest is repaid from the home’s sale proceeds.
Adding a Co-Borrower When the Numbers Are Tight
When retirement income alone doesn’t stretch far enough, an adult child or other family member can join as a non-occupant co-borrower. Their income counts toward the DTI calculation even though they won’t live in the property. They sign the note and share legal liability for the debt, which is what makes lenders comfortable including their earnings.
Fannie Mae permits this on purchases, limited cash-out refinances, and cash-out refinances. For loans run through Fannie Mae’s automated system with a non-occupant co-borrower, the maximum loan-to-value ratio is 95%. For manually underwritten loans, the cap drops to 90%, and the occupying borrower generally must contribute the first 5% of the down payment from their own funds unless the loan-to-value ratio is 80% or below.13Fannie Mae. Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction
Watch the credit scores. If the co-borrower’s score is lower than yours, the lender will likely price the loan off the lower score, which could push your rate up even though the co-borrower was supposed to help. Both profiles should be in good shape before you apply together.
Your Legal Protection Against Age-Based Denial
The Equal Credit Opportunity Act makes it illegal for any creditor to discriminate against an applicant based on age, provided the applicant has the legal capacity to enter a contract.14Office of the Law Revision Counsel. 15 USC 1691 – Scope of Prohibition The law also prohibits discrimination because income comes from a public assistance program, which directly protects Social Security recipients.15Federal Reserve Board. Equal Credit Opportunity Act (ECOA) Regulation B
In practical terms, a lender cannot deny your application because you’re 72 instead of 42, and cannot discount your Social Security income because it comes from the government rather than an employer. A lender can consider age indirectly when evaluating whether a specific income stream will last long enough, which is the three-year continuance requirement mentioned earlier, and it applies to everyone regardless of age.
If a lender violates the ECOA, you can sue for actual damages plus punitive damages of up to $10,000 in an individual action. Class actions are capped at the lesser of $500,000 or 1% of the creditor’s net worth.16Office of the Law Revision Counsel. 15 USC 1691e – Civil Liability The Consumer Financial Protection Bureau also enforces these rules and accepts complaints at consumerfinance.gov/complaint or by phone at (855) 411-2372.17Consumer Financial Protection Bureau. So, How Do I Submit a Complaint?
Documents to Gather Before You Apply
The paperwork burden runs heavier than for salaried workers, because you’re proving income from several sources rather than handing over two pay stubs. Expect to gather:
- A Social Security benefit verification letter, downloaded from your my Social Security account at ssa.gov. This replaces the “award letter” lenders used to request and shows your current monthly benefit.1Social Security Administration. How Can I Get a Benefit Verification Letter?
- Pension documentation: a recent statement from your plan administrator showing the monthly payment, or a 1099-R from the previous tax year.18Internal Revenue Service. Instructions for Forms 1099-R and 5498
- Recent statements for every IRA, 401(k), brokerage, and savings account. If you’re relying on asset depletion, the lender needs to confirm the balance, your sole ownership, and unrestricted access.
- Federal tax returns, usually the two most recent years.19Fannie Mae. Allowable Age of Credit Documents and Federal Income Tax Returns
- A VA award letter or Certificate of Eligibility if you’re including VA disability compensation.3Veterans Benefits Administration. VA Home Loan Guaranty Buyer’s Guide
Organizing these before you sit down with a loan officer prevents the back-and-forth that drags out the process.
Check the Tax Math Before Counting on a Deduction
Mortgage interest is deductible if you itemize, but the math has shifted. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.20Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Unless your mortgage interest plus other itemized deductions (state and local taxes, charitable contributions) exceed those thresholds, you’ll take the standard deduction and see no tax benefit from the mortgage.
This hits retirees with smaller mortgages especially hard. Borrow $200,000 at 7% and first-year interest is roughly $14,000, below the married filing jointly standard deduction on its own. A single filer might benefit from itemizing with enough other deductions stacked on top, but run the numbers before counting on a tax break that may not appear.
Consider the tax treatment of the income covering the payment too. Social Security benefits can be partially taxable depending on your combined income, and required minimum distributions from traditional IRAs and 401(k)s are taxed as ordinary income. Adding a mortgage payment doesn’t reduce those tax obligations. The real question isn’t whether you can afford the monthly payment in isolation, but whether you can afford it after taxes take their share of your retirement income.