Reverse Mortgages

Everything you need to know about reverse mortgages — how they work, who qualifies, and what to expect.

HECM Highlights

✓ No monthly mortgage payments
✓ FHA-insured — non-recourse protection
✓ Receive funds as lump sum, monthly, or line of credit
✓ You retain full ownership of the home
✓ Tax-free loan proceeds
✓ Available for purchase or refinance

Eligibility

✓ Age 62 or older
✓ Home is your primary residence
✓ Sufficient home equity
✓ Complete HUD-approved counseling
✓ Maintain home, taxes, and insurance
✓ No minimum credit score requirement

How a Reverse Mortgage Works

A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage that allows homeowners 62 and older to convert their home equity into cash — without selling the home or making monthly mortgage payments. You choose how to receive your funds: a one-time lump sum, fixed monthly payments for as long as you live in the home, a line of credit you draw from as needed, or any combination. Interest accrues on the borrowed amount and the loan balance grows over time. The loan is repaid when you sell, permanently move out, or pass away. FHA insurance guarantees that you — or your heirs — will never owe more than the home is worth at the time of repayment.

HECM for Purchase

You don't need to already own a home to use a reverse mortgage. The HECM for Purchase program lets you buy a new primary residence using reverse mortgage financing. You make a larger down payment (typically 50-60% of the purchase price from savings, the sale of a previous home, or other sources) and the HECM covers the rest — with no monthly mortgage payments going forward. This is ideal for retirees who want to downsize, relocate closer to family, or move into a more accessible single-story home while preserving their monthly cash flow.

Piggyback Reverse Mortgage

A piggyback reverse mortgage combines a traditional forward mortgage (first lien) with a HECM reverse mortgage (second lien). The reverse mortgage makes the monthly payments on the first mortgage, effectively eliminating out-of-pocket housing costs for the borrower. This strategy can be useful when a standalone HECM doesn't provide enough proceeds — for example, on a higher-value property where the HECM limit caps the available funds. The forward mortgage covers the gap, and the reverse mortgage services the debt. Not all lenders offer this structure, and it requires careful structuring to ensure both loans work together. As a broker with access to 175+ lenders, I can source both sides of this transaction and coordinate the closing.

Common Questions

Do I still own my home? Yes. You retain the title and can live in the home as long as you want. The lender has a lien, just like any mortgage.

What happens when I pass away? Your heirs inherit the home. They can sell it and keep any equity above the loan balance, refinance into a traditional mortgage to keep it, or let the lender sell it. FHA insurance ensures they never owe more than the home's value.

Can I outlive my reverse mortgage? No. As long as you live in the home, maintain it, and pay taxes and insurance, you can never be forced to move — even if the loan balance exceeds the home's value.

Are reverse mortgage proceeds taxable? No. Loan proceeds are not considered income and are not taxed. Consult a tax advisor for your specific situation.

How much can I borrow? The amount depends on your age (older = more), current interest rates (lower = more), and your home's appraised value (capped at the FHA limit). A rough estimate: ages 62-65 can access about 40-50% of the home's value; age 75+ can access 55-65%.

Get a Reverse Mortgage Quote

Andrew Baker · NMLS 2688601 · (949) 665-9090

HUD-Approved Counselors

HUD-approved counseling is required before closing a reverse mortgage. Contact any of the following national phone counselors to complete your session.

ClearPoint Financial Solutions

(800) 251-2227

CCCS of Maryland (CCCSMD)

(800) 642-2227

Credit.org

(800) 947-3752

GreenPath

(888) 860-4167

HOPE (Housing Options for the Elderly)

(844) 432-6467

Money Management International

(877) 908-2227

National Foundation for Credit Counseling

(866) 698-6322

Navicore Solutions

(866) 855-7736

Balance

(800) 777-7526

Cambridge Credit Counseling Corp.

(800) 757-1788

Horizon Counseling Inc.

(888) 315-4326

QuickCert, Inc.

(888) 383-8885

ReverseMortgageHelper.org / DebtHelper.com

(561) 472-8000

NeighborWorks Orange County

(714) 490-1250

*Not all agencies may provide counseling services in the state of California.

Common Questions

Who qualifies for a reverse mortgage?

HECM reverse mortgages are for homeowners aged 62 or older on a primary residence, with enough equity in the home and the ability to keep up taxes, insurance, and maintenance. HUD-approved counseling is required before an application can proceed. Some proprietary programs set a lower minimum age.

Do I still own my home with a reverse mortgage?

Yes. Title stays in your name. The reverse mortgage is a lien against the property, the same as any other mortgage. The loan becomes due when the last borrower permanently leaves the home, and the obligation to pay property taxes, insurance, and upkeep continues throughout.

Is reverse mortgage counseling required?

Yes, for HECM loans. You must complete a session with a HUD-approved counselor before the application moves forward. The session covers how the loan works, what it costs, and what alternatives exist. It is a consumer protection requirement, not a formality the lender can waive.

What is the HECM lending limit for 2026?

The 2026 HECM maximum claim amount is $1,249,125 nationwide, including the special exception areas. That figure caps the home value used in the calculation. The amount you can actually access depends on the age of the youngest borrower, the expected rate, and the property's value.

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