As more Americans end marriages later in life, some senior homeowners are turning to reverse mortgages as a way to manage the financial challenges of a “gray divorce.”

Divorces that arise when couples are in their 50s or older, commonly known as gray divorces, present unique financial challenges because they often occur after retirement, when income is largely fixed and assets are limited.

Rates of gray divorce in the U.S. doubled between 1990 and 2010, according to research published by the National Library of Medicine and cited by The New York Times.

Lisa Moriello, the national retail reverse sales manager at loanDepot and a Certified Divorce Lending Professional (CDLP), wrote in a think piece published on social media that the “stakes are higher” for divorce later in life.

“Older adults take a bigger financial and psychological hit from divorce than younger adults, and they have far less runway to recover,” Moriello wrote. “Retirement accounts, pensions and home equity that were built to support one household must suddenly support two.”

Moriello wrote that women often “absorb the largest setback” since they often have lower lifetime earnings and smaller retirement savings.

Unlike younger divorcing couples, older homeowners have less ability to replace lost income through new jobs or career changes. Many mistakenly believe they will keep both Social Security checks if a spouse dies, only to discover that is not the case and that their post-divorce income may be even tighter than expected.

“For a 35-year-old, a rough divorce settlement is a setback. For a 65-year-old, it can be the difference between a secure retirement and outliving their money,” Moriello wrote.

Housing is often the largest asset on the table, and decisions about the home can determine whether a newly single older adult can maintain financial stability.

In cases where one spouse wants to remain in the home, a reverse mortgage can “fund an equity buy-out while eliminating the required monthly principal-and-interest payment” if the homeowner is age 62 or older, Moriello wrote.

“Many of these homeowners are house-rich and cash-flow-constrained — exactly the profile where traditional financing options narrow just when they’re needed most,” she added.

In divorce settlements, the obligation to pay an ex-spouse can be treated as a “mandatory obligation,” allowing the spouse who stays in the home to tap a lump sum from a reverse mortgage to satisfy the settlement.

“A HECM for Purchase can help the departing spouse buy their next home without draining the settlement proceeds or taking on a payment they can’t sustain. These aren’t fringe strategies; they’re underutilized ones, largely because most divorce professionals — and frankly, most loan officers — were never trained to evaluate them,” she wrote.

Moriello noted that many divorce settlements negotiate the marital home based on assumptions rather than verified facts.

“The agreement says one spouse will refinance and buy out the other within 12 months — but nobody verified whether that spouse can qualify,” she wrote. “The decree awards the house to one party — but both names stay on the mortgage, and the departing spouse discovers years later that the contingent liability is blocking their own purchase. Support income is structured in a way that works for the family court but fails mortgage underwriting guidelines entirely.”

Moriello suggests that integrating mortgage planning into divorce negotiations earlier in the process could help reduce financing obstacles and improve long-term financial outcomes for both parties.