"Those that might have previously (had) a lump sum option to pay off mortgages might be turned down," she said.
Nance has recommended against reverse mortgages when she hears that seniors intend to move within five years, or if they have family members living with them on a long-term basis.
The problem for the FHA is that an increasing percentage of these loans are ending up in default. A record 54,000 FHA-insured reverse mortgage borrowers - or 9.4 percent - have defaulted. That's up from 8.1 percent in July 2011.
Unlike traditional loans, the majority of defaults are triggered when borrowers are unable to pay their property taxes or keep up with their homeowners' insurance.
Peak amid crisis?
Alba Moesser, 84, was financially independent and living debt-free when her son came to her with a business proposal. She found a way to help supply cash for the budding entrepreneur with a reverse mortgage.
"I was able to help him rebuild an apartment complex that is now rented out," said Moesser, who holds a Ph.D. in Hispanic literature and hasn't yet retired.
Moesser had taken out a reverse mortgage on her Covina, California home in 2011, but she refinanced into a fresh one this summer to come up with more cash. Under the pending rules, the amount she would have been able to take out would have been cut by about 15 percent, assuming her application made it through the new financial assessments.
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The popularity of reverse mortgages started to rise in 2001 and the volume of new FHA-backed reverse mortgages hit a peak of 115,000 in 2009. That number has since declined for three straight years, although it is expected to move higher, even under the tighter terms, as an increasing number of Baby Boomers retire.
By 2011, some major players, including Wells Fargo and Bank of America, stopped originating new reverse mortgage loans, in part because the lenders believed they were becoming riskier.
"It was originally intended for those borrowers considered house-rich and cash-poor. But now it is increasingly used as a tool for seniors tapping equity lines for broader retirement packages," said Stephanie Moulton, an assistant professor at Ohio State University who has served as a counselor for AARP, a retired persons' trade group.
Before her loan, Honeyman said: "I was barely squeezing by."