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.

The commission called for eliminating tax benefits for borrowing that reduces home equity.

The group also advocated an expansion of the myRA starter IRAs.

To broaden the scope of myRAs, the commission wants Congress to allow for both automatic enrollment and employer contributions in the program.

Other enhancements being advocated are to let employers choose to automatically enroll employees in myRAs with default contribution rates no lower than 2 percent and no higher than 6 percent of pay.

Automatic escalation would be allowed up to 8 percent of pay. Employers could also make either a matching or non-elective contribution of up to 3 percent, which would count toward the annual contribution limit.

In another recommendation, the commission said some retirement savings should be exempted from asset tests to qualify individuals for certain federal and state assistance programs.