For many reverse mortgage originators and brokers, the business can be all about finding new leads that can then help to generate new reverse mortgage loans. Learning about a segment of potential senior clientele can be crucial for those developing new sources of borrowers, and one area that may be worth keeping in mind revolves around housing communities designed for people aged 55 and above.

This was the impetus for RMD’s conversation with Bill Ness, CEO and founder of 55places, an online resource designed to give seniors holistic perspectives on the kinds of active adult communities they may want to choose to call home.

The amount of data that the company has access to gives it a unique perspective on what seniors can be looking for from a home they may want to live in as they approach retirement, which could have the benefit of helping reverse mortgage loan officers tailor their services toward the desires of their clients.

What seniors want from a home during retirement

The priorities that patrons of 55-plus housing maintain can help to serve as a window into the priorities of seniors who lead more active lifestyles, and Ness describes seniors who are looking for a very specific set of attributes these people look for in a new home.

“As it relates to the home, people want to downsize, but downsizing means different things to different people,” Ness explains. “You often find that when you look at the data, the actual square footage of the home that an active adult would move into is not much less than the home that they’re already living in, but it’s a different use of space. So for example, they probably have less emphasis on numerous bedrooms. They might be coming from a four or five bedroom house, but then now they need two or three bedrooms. There’s probably less emphasis on formal living areas. Think of the traditional layout of a formal living room and a formal family room with a dining room and a kitchen.”

Instead of having that more formal room layout in their home, they may be looking for a more open concept with additional break rooms and a less typical dining area. Perhaps more importantly than the home layout, though, could be the sense of community that they’re looking for.

“Think of the people who are selling a home they’ve lived in for 40 years,” Ness says. “They probably moved into a neighborhood when it was new construction, and at the same time — as happens with a lot of communities — young families or newlyweds may have moved in at that time.”

What ultimately begins to happen is that the community changes to one that skews younger, which may leave some seniors to yearn for the kind of connection that they had when they were young parents raising kids alongside other young parents, Ness explains.

“Oftentimes, residents of a particular neighborhood, if they lived there for 30 or 40 years, will come to realize that they no longer fit in and there’s a younger demographic that’s taking back over,” Ness says. “So, they’ve lost that social connection that they probably once had when they first moved into that community. Moving into an active adult community, they want to regain that connection and that opportunity to socialize, and to meet new friends who share similar interests. The nature of an active adult community is you fall into that.”

Many who live in an active adult community are the same age, with similarities in background, Ness says.

“Most of them are empty nesters, and all of them are looking to be social in some fashion, whether that’s in fitness groups, hobby groups or card clubs — you name it, everything in-between,” he says. “I think that’s really important. Then, of course, the last aspect is the amenities. People are always looking for some sort of way to stay active and fit, and in most active adult communities you’re going to find some kind of clubhouse or pool or fitness center, or even much more than that in some cases.”

How to connect with seniors looking to make a home purchase

While HECM for Purchase (H4P) is still a relatively underutilized option in the broader context of the larger reverse mortgage industry, those people who have moved into active adult communities through some kind of financing could provide some insight into what this kind of demographic could be looking for from a program that allows them to purchase a new home, like H4P.

“I think that when you’re talking about the reverse mortgage product or HECM for Purchase, people have a knee-jerk reaction: [they ask] what is this? How does it work? What are the numbers? Where’s the ‘gotcha?’,” Ness explains. “The way we try to promote this is first you have to appeal to what their life could [look like] if they choose to get a mortgage like this. What would they do with that extra money? Are they going to travel? Are they going to spoil their grandkids?”

Putting their goals in the front of their minds, and drawing a path that a reverse mortgage product would help facilitate to those goals can make a big difference in appealing to the active adult segment, since they are a very goal-oriented group, Ness explains. That emotional appeal can be very powerful, which can then help motivate them to learn about necessary product details.

“If you can get them to talk about what it is that they would love to do with their life or what’s important to them, and then equate it back to [the idea that] this is a mortgage product that helps you do that, it’s a lot easier to connect with that person as opposed to just start talking numbers, percentages and the fine print of how the loan product works, and so on,” he says. “That’s, I think, my main advice: just appeal to their emotional senses when they’re asking about this particular product.”