ABSTRACT
Society’s challenge is to determine how to transform or convert the equity that the elderly have stored up in residential housing into a stream of income, without requiring them to move in order to reduce both the burden of their income support on the budget and the possibility of nonelderly income and wealth poor taxpayers subsidies going to the income poor but wealth rich elderly. Debt equity conversion plans are sometimes referred to as reverse mortgages, since the homeowner is borrowing to consume rather than to purchase the home. Sale-leaseback plans generally permit the purchase of a larger annuity because the proceeds from the sale of the entire equity of the house may be used rather than only the proceeds of the loan against the equity. A goal of the program in addition to converting home equity to income is to rehabilitate the elderly homeowner’s property plus pay for maintenance expenses.
