FHA-insured HECM
The Home Equity Conversion Mortgage is the most common reverse mortgage and is insured by FHA/HUD. It requires HUD-approved counseling and must meet HECM rules.
Reverse mortgage clarity
How to get a reverse mortgage without the runaround.
Clear guidance for homeowners 62+, adult children helping parents, and buyers considering a reverse mortgage for purchase. No corporate fog. No pressure. Just a straight explanation of the options, obligations, and next steps.
HECM loans
HECM for Purchase
Jumbo / proprietary options
Line of credit strategy
62+Common HECM borrower age requirement
$0Required monthly principal & interest payment
HUDIndependent counseling required for HECM
YesTaxes, insurance & upkeep still required
Plain English
What a reverse mortgage actually does.
A reverse mortgage lets eligible homeowners borrow against home equity. Instead of making required monthly principal and interest payments, the balance is generally paid back later. The borrower still owns the home and still has responsibilities.
Traditional mortgage
- ✓You borrow money and usually make monthly payments.
- ✓The balance usually goes down as you pay it back.
- ✓Income and debt-to-income are usually major qualification factors.
- ✓Missed payments can trigger default.
Reverse mortgage
- ✓No required monthly principal and interest payment while obligations are met.
- ✓Interest and fees are added, so the balance generally grows over time.
- ✓Designed around age, home value, equity, rates, and property eligibility.
- ✓You must keep taxes, insurance, HOA dues if any, and home maintenance current.
Loan options
The main types of reverse mortgages.
Not every option is right for every borrower. The point is to compare what exists, what you may qualify for, and what actually fits the plan.
HECM for Purchase
A way for eligible buyers to purchase a new primary residence using a reverse mortgage plus a required cash investment at closing.
Proprietary / jumbo reverse
Private reverse mortgage products that may be used for higher-value homes or scenarios outside HECM limits. These are not FHA-insured.
Single-purpose reverse
Programs sometimes offered by state/local governments or nonprofits for a specific use, such as property taxes or repairs. Availability is limited by area.
Accessing funds
You may have more than one way to use the proceeds.
Depending on the program, eligibility, rate type, and available proceeds, reverse mortgage funds may be structured as a line of credit, a lump sum, monthly payments, or a combination. The best setup depends on whether the goal is cash flow, emergency reserves, paying off an existing mortgage, downsizing, or buying the next home.
Line of credit
Access funds as needed rather than taking everything up front.
Lump sum
Useful in some fixed-rate or payoff scenarios, but it can increase interest cost because more is borrowed sooner.
Monthly disbursement
May help create predictable cash flow for a specific period or while the borrower remains in the home.
Reverse for purchase
Downsizing without taking on a traditional monthly mortgage payment.
A HECM for Purchase can be useful when someone sells a home, wants to buy the next primary residence, and wants to preserve more cash than an all-cash purchase would allow.
1. Sell or bring funds
The buyer brings the required monetary investment from approved sources such as sale proceeds, cash on hand, or eligible assets.
2. Reverse mortgage fills the gap
The HECM proceeds cover part of the purchase price and eligible financed costs, based on age, value, rates, and program rules.
3. Live in the new home
The borrower must occupy it as the primary residence and keep taxes, insurance, maintenance, and other property charges current.
A to Z
The clean path from curiosity to closing.
This is the version without the sales fog. Each file is different, but the basic flow is simple.
Quick strategy review
Clarify age, property type, estimated home value, current mortgage balance, state, and what you want the reverse mortgage to solve.
Initial estimate
Review rough proceeds, payoff needs, expected costs, and whether a standard HECM, HECM for Purchase, or proprietary option might fit.
HUD-approved counseling
For HECM loans, an independent HUD-approved counselor explains costs, obligations, alternatives, and borrower responsibilities.
Application and documents
Collect identity, property, mortgage, insurance, and financial information needed to document eligibility and obligations.
Appraisal and underwriting
The property is reviewed for value, FHA/property standards where applicable, liens, title, insurance, taxes, and program requirements.
Closing and after closing
Sign final documents, complete any rescission period when applicable, then use proceeds according to the plan while maintaining the home obligations.
A reverse mortgage may be worth exploring when...
- You plan to remain in the home long enough for the costs to make sense.
- You have strong equity but want more monthly cash flow or reserves.
- You want to pay off an existing mortgage and remove the required monthly principal/interest payment.
- You are downsizing and want to compare all-cash purchase vs. HECM for Purchase.
- You understand that home equity is being used and the loan balance can grow.
It may be the wrong tool when...
- You may move soon or sell shortly after closing.
- You cannot keep property taxes, insurance, HOA dues, or maintenance current.
- Your goal is short-term cash without thinking through long-term equity and heirs.
- A lower-cost option, downsizing, or other financial strategy solves the problem better.
- The home or borrower does not meet program requirements.
Start simple
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FAQs
Common reverse mortgage questions.
These are general answers. Your specific answer depends on the borrower, property, program, state, and current guidelines.
What is a reverse mortgage?
A reverse mortgage is a home-secured loan for eligible homeowners. With the most common type, the FHA-insured HECM, borrowers are generally 62 or older. The loan is usually repaid when the borrower sells, moves out, passes away, or fails to meet the loan obligations.
Do I still own my home?
Yes. Title remains in your name. You still have to live in the home as your primary residence, pay property taxes and homeowners insurance, keep the home in good condition, and meet the terms of the loan.
Do I have to make monthly payments?
Required monthly principal and interest payments are generally not required on a reverse mortgage while the borrower meets the loan obligations. You can choose to make payments voluntarily, but you are still responsible for taxes, insurance, property charges, and maintenance.
Is a reverse mortgage free money?
No. It is a loan. Interest, mortgage insurance where applicable, and fees can be added to the balance, so the amount owed usually grows over time and remaining home equity can decrease.
What are the different types of reverse mortgages?
The major categories are FHA-insured HECM loans, proprietary or jumbo reverse mortgages that are not FHA-insured, and single-purpose reverse mortgages sometimes offered by state/local governments or nonprofits for limited uses. HECM for Purchase is a HECM option used to buy a primary residence.
What is a HECM for Purchase?
It is a reverse mortgage structure that can allow an eligible buyer to purchase a new primary residence using reverse mortgage proceeds plus a required monetary investment at closing. This is often compared with buying a smaller home all cash after selling a previous home.
What can cause the loan to become due?
Common maturity events include selling the home, the last borrower or eligible non-borrowing spouse no longer living in the home as a primary residence, death, or failing to meet obligations such as paying taxes, insurance, and maintaining the property.
Will my heirs lose the house?
Heirs typically have options, such as selling the home to repay the loan or paying off the loan to keep the home. The exact options and deadlines depend on the loan, servicing, property value, and rules in effect.
Will reverse mortgage proceeds affect taxes or benefits?
Reverse mortgage proceeds are loan advances, not ordinary income, but keeping proceeds in an account can affect some need-based benefits such as SSI or Medicaid. Ask a tax, legal, or benefits professional about your exact situation.
What is the first step?
Start with a simple option review: age, property state, home value, current mortgage balance, goals, and timeline. From there, you can compare whether a reverse mortgage, HECM for Purchase, downsizing, refinance, HELOC, or doing nothing makes more sense.