Equal Housing Lender
Fairway NMLS #2289
Ken Powell NMLS #2656628
For many of your clients in Calvert, Charles, St. Mary's, and Prince George's counties, home equity is the largest asset they own, and the only one with no plan attached to it. Ken works alongside advisors, planners, and CPAs to coordinate that asset into the retirement picture, without ever stepping into your role.
Think of a household's finances as three buckets: monthly income (wages, Social Security, pensions), the nest egg (401(k)s, IRAs, brokerage accounts, life insurance), and home equity. During the working years, money flows into all three. In retirement, most households stop contributing to home equity and start drawing from the nest egg, while traditional spending continues, leaving home equity as the one asset nobody touches, right up until it's needed for a health event, a market downturn, or a legacy goal nobody planned for. Research from Texas Tech University and Boston College's Center for Retirement Research has found that coordinating buckets two and three, rather than treating the home as untouchable, gives retirement income a better chance of outlasting the retiree and can increase the eventual legacy left to heirs.
A HECM line of credit is secure (it cannot be capped, reduced, frozen, or canceled by Fairway based on market conditions as long as the borrower meets loan terms), open-ended like a credit card, and grows: the unused balance compounds at the same rate as the loan balance, giving the borrower greater borrowing capacity over time regardless of swings in home value. Establishing it early, before it's needed, captures more of that growth.
Drawing from housing wealth in down-market years, rather than liquidating portfolio assets at depressed prices, is a documented approach to managing sequence risk in the fragile early years of retirement. Ken can model the mortgage side while you model the portfolio side.
Paying off an existing mortgage with a HECM converts a required monthly payment into an optional one, often the single largest cash flow improvement available to a retiree on a fixed income.
Proceeds, or an established line of credit, can fund LTC insurance premiums before care is needed, or pay for care directly in the absence of other planning, keeping options open for clients who waited too long to insure.
Some planners let HECM interest accrue before a lump payment so the eventual deduction can be bunched, or coordinate paying interest in the same year IRA withdrawals are taken, to offset retirement income. These are concepts to raise with the client's CPA, not something Ken advises on directly.
Right-sizing clients can buy the retirement home with roughly 45 to 70 percent down and no required monthly payment, preserving portfolio assets that an all-cash purchase would consume. Details on the H4P page.
Ken's lane is the mortgage. Yours is the plan. He does not give investment, tax, or insurance advice, and he works best with professionals who want a technician on the housing-wealth side rather than a salesman near their book.
A client owns her home outright at $800,000 with a $300,000 mortgage balance remaining and a required $3,139 monthly principal-and-interest payment. She has $675,000 in retirement accounts and wants to stop working but doesn't want to draw down savings aggressively.
Option modeled: refinance into a HECM, pay off the $300,000 balance, receive roughly $50,000 at closing, and eliminate the $3,139 monthly payment, while continuing to pay property taxes and insurance.
Result: $3,139 a month in freed-up cash flow and a more conservative withdrawal rate from her portfolio, without changing her income or giving up the home. (Illustrative scenario; figures are not a quote for any specific borrower.)
| Question | HELOC | HECM Line of Credit |
|---|---|---|
| Minimum age | No | 62+ |
| Required monthly principal and/or interest payments | Yes | No* |
| Unused line grows over time | No | Yes |
| Non-recourse (never owe more than home is worth) | No | Yes |
| Draw period limited | Typically, 5-10 years | No |
| Line can be frozen, reduced, or canceled on market conditions | Yes | No |
*Borrower must still pay property taxes, homeowners insurance, and maintenance, and occupy the home as a principal residence.
A HECM line of credit cannot be frozen, reduced, or canceled based on market conditions the way a HELOC can, has no fixed draw period, carries no required monthly principal and interest payment, and its unused portion grows over time at roughly the same rate as the loan balance, independent of home value. A HELOC typically has a 5 to 10 year draw period, required payments, and no growth feature on the unused line. Both let the homeowner keep the home and draw funds as needed.
Generally, no. HECM loan proceeds are not typically subject to income tax, since they are loan advances rather than earned or investment income. This is not tax advice, and clients should confirm their specific situation with their own tax advisor or CPA before relying on it in a plan.
It separates a household's financial life into monthly income (wages, Social Security, pensions), the nest egg (401(k)s, IRAs, brokerage accounts), and home equity. Most people spend decades contributing to all three, then stop contributing to home equity and start drawing down the nest egg in retirement. Research from Texas Tech and Boston College's Center for Retirement Research has found that coordinating the nest-egg bucket with the home-equity bucket, rather than treating the house as untouchable, can make retirement income last longer and increase a household's likelihood of leaving a larger legacy.
A borrower can draw from an established HECM line of credit during a market downturn instead of selling portfolio assets at depressed prices, giving the portfolio time to recover without permanently impairing it. The line of credit's growth feature also rewards establishing it earlier rather than waiting until it's needed, particularly in a rising-rate environment, since the unused balance grows faster when rates are higher.
A HECM generally does not affect Social Security or Medicare benefits. Medicaid and other need-based programs are different: eligibility is set state by state, and how HECM draws are held in a client's bank account could affect asset-based thresholds. This is exactly the kind of cross-disciplinary question where your planning expertise and Ken's product knowledge belong in the same conversation.
That view is outdated. A growing number of financial advisors now treat the HECM line of credit as a planning tool to be put in place proactively, not a product to reach for only after other assets are exhausted. Used earlier in retirement, it can create cash flow efficiencies among a household's other assets rather than simply rescuing a household that has run out of options.
The branded, printable version of this material, with sourced research on retirement income strategies with housing wealth, HECM line-of-credit planning concepts, long-term-care discussions, HECM for Purchase, and coordinated versus non-coordinated approaches.
This material is designated for professional use and is not distributed to the general public, so it is provided by request rather than posted for download. Ken verifies each request and sends the guidebook to your business email. He is also available for a 30-minute overview with your team, in person across Southern Maryland and Prince George's County or by video.
This guidebook is distributed to verified financial professionals directly rather than posted publicly. Submit your professional details and Ken will send it to your business email, usually the same business day.
Fairway Independent Mortgage Corporation, National Recognition
These are national recognitions earned by Fairway Independent Mortgage Corporation (NMLS #2289), Ken's lender, not an individual award given to Ken Powell. Source: fairwayreverse.com.
Describe it in general terms, no client names needed, and Ken will outline what the housing-wealth options look like so you can decide whether the conversation is worth having.