Reverse Mortgages

A reverse mortgage is a loan. That sentence is doing more work than it looks like it is, because the product is advertised so badly, so often, that a lot of people arrive believing it is a government program, or a way to get money that never has to be paid back. It is neither.

What it actually does is let a homeowner aged 62 or older convert part of their equity into cash without making a monthly mortgage payment. The balance grows instead of shrinking. It comes due later — and the "later" is the part worth understanding before anything else.

Who qualifies

For an FHA-insured HECM, which is the main reverse mortgage program:

• The youngest borrower is 62 or older at closing. Per 24 CFR 206.33, that is a hard floor, not a guideline.
• The home is your principal residence, and you keep living in it.
• You own it outright or have substantial equity. How much you can draw depends on your age, the home's value, and rates — an older borrower draws more than a younger one on the same house.
• You complete counseling with an independent HUD-approved counseling agency, and the agency issues a certificate. This is required by 24 CFR 206.41, and the certificate is good for 180 days.

That counseling requirement is not a formality anyone should try to route around, and we could not waive it if you asked. The counselor does not work for us and is not paid by us — that independence is the entire point of the rule.

What you still owe every year

No monthly mortgage payment is required. You do still have to:

• Pay property taxes, including special assessments
• Pay homeowner's insurance, and flood insurance where it applies
• Pay ground rents, condominium fees and homeowners' association dues
• Keep the home in good repair
• Live there as your principal residence

Per 24 CFR 206.205 and 206.27(c), failing on any of those can make the loan due and payable. That is the honest version of "no payments," and anyone who tells you otherwise is describing a product that does not exist.

The other triggers that make the loan due: the last surviving borrower dies, the home is sold or transferred, or all borrowers stop living there for more than twelve consecutive months.

What protects you

It is non-recourse. Neither you nor your heirs ever owe more than the home is worth when the loan is settled, even if the balance has grown past the value. That protection is statutory.

Your heirs have a defined way out. They are not inheriting the house free of the loan — nobody should tell you they are — but under 24 CFR 206.125 they can satisfy it by repaying the balance or by selling the property for at least 95% of its appraised value.

Nobody can require you to buy an annuity as a condition of the loan. Federal law prohibits it, and so does California law separately.

The 2026 numbers

For FHA case numbers assigned in 2026, the HECM maximum claim amount is $1,249,125 (HUD Mortgagee Letter 2025-22). That is the ceiling FHA will insure against — a more valuable home does not raise it.

FHA charges mortgage insurance on a HECM, both upfront and annually on the balance. We will show you the actual dollar figures for your situation rather than percentages on a web page, because what matters is what it costs on your house, not what the rate is called.

Above the FHA ceiling: proprietary reverse mortgages

For higher-value homes there are proprietary reverse mortgages — sometimes called jumbo reverse — that are not FHA-insured. That single difference drives most of the others: no FHA mortgage insurance, and no FHA maximum claim amount capping the loan.

It also means the FHA rulebook does not automatically apply. Age minimums, counseling practice, draw structures and protections are set by each lender and differ between products. We will not print a number here that we would have to caveat, because these genuinely vary — ask us and we will tell you what the specific investor's terms are for your situation.

In California, note that the state's reverse mortgage rules are written around the product, not around FHA. A proprietary reverse mortgage on a California home carries the same state counseling protections as a HECM.

Two state rules worth knowing before you start

California. No lender may accept a completed application or charge you a fee until seven days after your counseling session (Civil Code §1923.2). You also receive a plain-language statement and a worksheet before counseling, and you will be given a list of at least ten approved counseling agencies to choose from.

Texas. Reverse mortgages are written into the Texas Constitution, with their own required notice, a rule that closing cannot happen until the twelfth day after you receive it, a counseling window, and foreclosure only by court order. Texas built more procedure around this product than almost any state, which generally works in the borrower's favor.

When it is the right answer, and when it is not

It can work well for someone with substantial equity, a genuine need for cash flow, and the intention and means to stay in the home long-term and keep up taxes, insurance and upkeep.

It works badly for someone who may need to move within a few years, whose budget is already too tight to cover taxes and insurance reliably, or who is being pushed toward it to buy a financial product with the proceeds.

There are usually alternatives worth pricing against it — a second mortgage or a line of credit if there is income to support a payment, a refinance if rates and credit allow, or selling. We will run the comparison honestly and tell you when a reverse mortgage is the wrong tool, which happens often enough that you should expect the conversation.

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FAQ

How old do you have to be to get a reverse mortgage? For an FHA-insured HECM, the youngest borrower must be 62 or older at closing, per 24 CFR 206.33. Proprietary reverse mortgages set their own age requirements, which vary by lender and product.

Do I have to make monthly payments on a reverse mortgage? No monthly mortgage payment is required. You must still pay property taxes, homeowner's insurance, ground rents, condominium and association fees, keep the home in repair, and live there as your principal residence. If you do not, the loan can become due and payable and you could lose the home.

Is a reverse mortgage a government benefit? No. A HECM is a loan that is insured by the Federal Housing Administration, which is not the same thing as a government benefit or a grant. It must be repaid.

Is counseling really required? Yes. For a HECM it is required by 24 CFR 206.41, through an independent HUD-approved counseling agency that is not paid by the lender. The certificate is valid for 180 days. In California, a lender may not accept a completed application or charge a fee until seven days after counseling.

Can I owe more than my house is worth? No. A reverse mortgage is non-recourse. Neither you nor your estate owes more than the property is worth at settlement.

What happens to my heirs? They do not inherit the home free of the loan. When it becomes due, they can repay the balance and keep the property, or sell it — HUD rules let them satisfy the loan at 95% of appraised value.

What is the reverse mortgage limit for 2026? The HECM maximum claim amount is $1,249,125 for FHA case numbers assigned in 2026. Proprietary reverse mortgages are not bound by it, since they are not FHA-insured.

What makes a reverse mortgage become due? The last surviving borrower dies; the home is sold or transferred; all borrowers stop occupying it as a principal residence for more than twelve consecutive months; or the borrower fails to pay property charges or maintain the property.