Equity Conversion 
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority and you can order it here)

A reverse annuity mortgage (RAM) in which a borrower obtains a loan in the form of monthly payments over an extended period of time, using his or her property as collateral.  When the loan comes due, the borrower repays both the principal and interest.  A RAM cannot be arranged until the borrower has paid off the original mortgage.

A federal program, named the Home Equity Conversion Mortgage Insurance Demonstration, allows people 62 or older to receive regular payments by borrowing against the equity in their homes.  The loans are repaid when the house is sold.  The payments are based on life expectancy.  The program is sponsored by the Department of Housing and Urban Development, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation.  In 1989 federal mortgage agencies began creating a secondary market where lenders can sell the loans after they have been originated.  Some lenders have not been overly enthusiastic about the reverse equity program because of the potential losses.  The program is designed for homeowners who are “house rich and cash poor.”  It is estimated that about 1.7 million elderly people own a home worth at least $50,000 but have annual income below $10,000.

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