Small reverse mortgages of up to 30 percent of a home’s value would be valuable to older Americans to pay for a number of household expenses, according to a federal panel.

Such loans could be used for home modifications, to help finance grandchildren’s’ educations and to pay medical bills, according to a report released Thursday by the Bipartisan Policy Center Commission on Retirement Security and Personal Savings.

The offering would broaden the market for reverse mortgages, giving “home-rich, cash-poor” retirees the ability to tap into a smaller amount of their home value at a more-affordable cost, according to the report.

The commission is also calling on the Labor Department, the Social Security Administration, the Pension Benefit Guaranty Corporation and the Consumer Financial Protection Bureau to mount major education and advertising campaigns to widen the use of traditional reverse mortgages.

“For individuals or couples who lack substantial savings in a retirement plan but who own their residence, homeownership can be a major source
of retirement security,” said the report.

The Social Security Administration could include information about counseling options on Social Security statements, through separate communications with beneficiaries or during the application process for benefits, the panel said.

Former Senate Budget Committee Chair Kent Conrad and former Pension Benefit Guaranty Corporation Executive Director Jim Lockhart led the two-year retirement security task force. Other members included past Employee Benefit Research Institute President Dallas Salisbury, former MetLife Chair, President and CEO C. Robert Henrikson and former Congressional Budget Office Director Robert Reischauer.

But while taking money out of home equity in retirement years should be encouraged, the panel said tapping it before then should be discouraged.

The commission claimed the growing popularity of home equity loans before retirement has contributed to the doubling of older Americans holding mortgages in recent years.

Debt service can sap limited retirement income, leaving elderly households with less money to spend on needs, the report warned.