Staying in Your Home Without a Reverse Mortgage: Smarter Ways to Unlock Your Equity

If you’re like many homeowners here in Silicon Valley—or across the country, for that matter—you’ve probably had the thought: “I love my home, and I’d like to stay here as long as I can.” And who could blame you? This is where you’ve built your life, your memories, your community.

But as we get older, and especially if retirement income isn’t quite stretching far enough, it’s common to start wondering: How can I afford to stay put? For a lot of folks, that means looking at the equity they’ve built in their home—equity that can feel a bit like money locked in a vault, just out of reach.

One solution that gets tossed around a lot is the reverse mortgage. But as I’m sure you’ve heard—or maybe even experienced first-hand—they’re not exactly cheap. And they can come with a lot of strings attached, fees, and fine print that can leave you or your heirs in a financial bind down the road.

So today I want to talk about alternatives. Because yes, there are ways to tap into your home’s equity without taking on a reverse mortgage—and in many cases, they may be a smarter, more flexible, and more affordable path forward.

Let’s Talk About the Problem

First, let’s acknowledge the elephant in the room: if you’re living in the Bay Area, you’re likely sitting on a lot of equity. I talk to folks all the time who bought their homes for $200,000 or $300,000 back in the day—and now, those same homes are worth $1.5 million or more.

The challenge is that while home values have skyrocketed, retirement income often hasn’t kept pace. And in a region where groceries, gas, property taxes, and utilities seem to go up every month, it’s no wonder that many homeowners are exploring ways to make that equity work for them—without giving up the home they love.

So let’s dig into the options. Because the good news is, reverse mortgages are not the only game in town.

Option 1: Home Equity Sharing Agreements

Let’s start with one of the newer players in the space: home equity sharing agreements. There are a number of financial firms today offering these creative alternative to a reverse mortgage. Some of these include:

Here’s how it works: these companies provide homeowners with a home equity investment (HEI) option, allowing them to receive a lump sum of cash in exchange for a share of their home’s future appreciation. There are no monthly payments or interest charges. The investment is typically settled when the homeowner sells the home or after a set term (usually 10 or 30 years), at which point they are repaid based on the home’s current value. It’s designed for homeowners who want to access their equity without taking on new debt.

This can be an excellent fit for homeowners who are cash-poor but equity-rich. You’re not taking on new debt, and you’re not locked into making payments you can’t afford.

Pros:

No monthly payments
Cash in hand for expenses or improvements
You retain ownership and control of the property

Cons:

You’ll give up a share of your home’s future appreciation
There may be limits on refinancing or transferring the property
It can be hard to predict how much you’ll eventually owe

Best for: Homeowners who want flexible access to equity and are OK with sharing future gains.

Option 2: Property Tax Deferral Programs

Property taxes are one of the biggest expenses for many older homeowners—especially here in California. The good news is, the state offers a Property Tax Postponement Program for seniors, blind, and disabled homeowners.

If you qualify, the state will pay your property taxes on your behalf. It’s technically a loan (with a very low interest rate), but there’s no need to repay it until you sell the home or move out permanently.

Pros:

Low-cost way to ease monthly financial pressure
Keeps you in your home
Doesn’t affect ownership or appreciation

Cons:

Available only to those who qualify (age, income, and equity limits)
Interest does accrue, albeit slowly

Best for: California seniors who want a safe, government-backed way to lower their monthly outflow.

Option 3: Accessory Dwelling Units (ADUs)

You’ve probably heard me talk about ADUs before—backyard cottages, garage conversions, or in-law suites. But what you might not realize is just how powerful an ADU can be as a financial tool for homeowners looking to stay put.

Building or converting space into an ADU allows you to generate rental income, which can go a long way toward covering your living expenses—or helping pay for in-home care, maintenance, travel, or even fun stuff like grandkid adventures.

I’ve had clients build beautiful ADUs and rent them out to traveling nurses, local teachers, or other professionals. Some even use them for family, freeing up space and reducing costs across the board.

And now that Santa Clara and Santa Cruz counties (among others) are allowing ADU condominium conversions, you may even be able to legally sell your ADU while continuing to live in your primary residence. (Let me know if you want to learn more about this—it’s a hot topic right now.)

Pros:

Steady income stream
Increases property value
May allow for sale of a portion of your property

Cons:

Upfront construction costs
Zoning/permitting hurdles
Managing tenants (though you can hire that out)

Best for: Homeowners with space to convert and a desire for consistent passive income.

Option 4: Intra-Family Sale or Equity Loan

Here’s a path that doesn’t get talked about enough: if you have adult children or close relatives, you may be able to work out a win-win financial arrangement that keeps the home in the family and gives you access to your equity.

This could look like:

Selling the home to a family member with a rent-back
Having a family member co-sign or fund a private equity loan
Setting up a private reverse mortgage agreement

It’s important to work with legal and financial professionals to structure this correctly, but for families with strong trust and shared goals, this can be a way to keep housing stable across generations.

Pros:

Keeps home in the family
Potentially better terms than bank loans
More flexible repayment structures

Cons:

Risk of conflict if terms aren’t clear
Requires trust and transparency
Legal help strongly advised

Best for: Families with good relationships and a desire to create intergenerational wealth.

Option 5: HELOCs and Home Equity Loans (With Caution)

I’d be remiss not to mention the old standby: a Home Equity Line of Credit (HELOC) or Home Equity Loan. These are straightforward ways to borrow against the equity in your home—just like taking out a second mortgage.

But for homeowners with limited income, these can be risky. You’ll be taking on monthly payments, and if your income is fixed or unpredictable, that could backfire. However, in certain scenarios—especially for short-term needs—they can still be the right fit.

Pros:

Familiar and widely available
Predictable repayment schedule
No need to give up ownership

Cons:

Requires monthly payments
Approval can be harder for retirees
Risk of foreclosure if payments are missed

Best for: Homeowners with enough income to reliably make monthly payments.

Option 6: House Hacking

One increasingly popular alternative to a reverse mortgage is house hacking—the practice of renting out part of your home to generate income. While it’s often associated with younger homeowners building wealth, house hacking can be an excellent strategy for seniors who want to stay in their homes longer while creating extra monthly cash flow.

If you have unused bedrooms, a guest suite, or an accessory dwelling unit (ADU), you can lease that space to a tenant. This setup allows you to collect rent to help cover living expenses, home maintenance, or healthcare costs—without tapping into your home equity or taking on debt.

For seniors who may benefit from some help around the house, this strategy can also be blended with informal caregiving arrangements. Some tenants may be open to assisting with light chores, errands, or companionship in exchange for discounted rent—or as part of their agreement. However, it’s important to structure these arrangements carefully to ensure that the tenant still pays rent and contributes to your financial stability.

The key is maintaining clear agreements and boundaries. You can use formal leases and, if desired, include terms around support tasks, similar to how some homeowners rent rooms to traveling nurses or graduate students in caregiving fields.

With the right setup, house hacking can offer a win-win: you maintain independence in your home, benefit from consistent income, and potentially get some extra help when you need it.

Pros:

Generates monthly income to help cover living expenses, healthcare, or property costs
Utilizes unused space (spare bedrooms, ADU, converted garage, etc.)
Potential for help around the house if a tenant agrees to light caregiving or chores
Offers companionship and can reduce feelings of isolation

Cons:

Loss of privacy when sharing space with a tenant
Requires tenant screening and management, which may be stressful or time-consuming
Maintenance or wear-and-tear could increase with more people living on the property
Compatibility issues if tenant and homeowner have different lifestyles or expectations

Best for: homeowners who have extra space and want to generate income without taking on debt. It’s a great option for those comfortable sharing part of their home and looking for financial flexibility, possibly with the added benefit of companionship or light support from a tenant.

Option 7: Sell and Downsize (or Rent Back)

I know, I know—this one feels like a last resort for many people. But sometimes, the simplest path is also the smartest one.

Selling your home and moving into something smaller—whether it’s a condo, a single-level home, or even a high-end rental—can unlock a lot of equity. If you’re living alone in a 4-bedroom house that used to be full of family, downsizing could provide a financial cushion that gives you peace of mind for years to come.

And don’t forget—you can always rent back the home you sell. It’s not common, and I personally have never seen it happen, but I have certainly deals where the buyer lets the seller stay on as a tenant for months or even years. Actually, I’ve even heard of cases where people sold their homes and in exchange received a life estate, where they have a deeded, recorded non-financial interest in the property that allows them to continue living there until they pass on. Hugh Heffner is one such person who made a deal like that.

Pros:

Maximum equity unlocked
Potential to simplify your lifestyle
More financial flexibility

Cons:

Emotional attachment to the home
Moving can be stressful
Potential rent increases if renting back

Best for: Homeowners ready to simplify and put their equity to work.

The Bottom Line: You Have Options

If there’s one thing I hope you take away from this—it’s that you don’t have to sign up for a reverse mortgage to access your equity and stay in your home.

There’s no one-size-fits-all answer. Every homeowner’s situation is unique, and what makes sense for your neighbor may not be right for you. That’s why I always recommend having a conversation—not with a salesperson, but with someone who understands your goals, values your independence, and can walk you through the options.

If you’d like to talk about how any of these strategies might apply to your home—or if you’re just curious what your home might be worth in today’s market—I’m always happy to connect.

You’ve worked hard for your home. Let’s make sure it works just as hard for you.