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As of Oct. 15, 2026
A reverse mortgage lets older homeowners borrow against home equity without a regular monthly loan payment — but the balance usually grows, you must keep paying taxes and insurance, and the loan comes due when you leave the home. This page covers the FHA-insured Home Equity Conversion Mortgage (HECM) using free HUD, CFPB, FTC, and OCC materials, with dates.
Not financial advice. This page republishes what HUD, the CFPB, the FTC, the OCC, and the Code of Federal Regulations publish about FHA HECM reverse mortgages, with dates. It does not tell you to take or avoid a loan, quote proceeds, or endorse any lender. Talk with a HUD-approved reverse mortgage counselor before you apply. Confirm current MIP rates and program rules on hud.gov.
Published HECM facts only — not a loan offer.
Sources: CFPB: who can get a reverse mortgage · HUD Mortgagee Letter 2017-12 (MIP) · CFPB: reverse mortgage costs · CFPB: heirs keep or sell · HUD: 2026 HECM maximum claim amount.
Match your situation to the published framing below. The "best move" is which education step to take next — not buy/sell advice and not a lender pick.
| Your situation | Best move | Why (source) |
|---|---|---|
| I am under 62 (and would be the youngest borrower) | A HECM is not available. Look at HELOC/home equity, refinance, downsizing, or local aid — not a reverse mortgage yet. Go | Youngest HECM borrower must be 62+ at closing (CFPB; 24 CFR §206.33). (CFPB: who can get a reverse mortgage · 24 CFR Part 206 (HECM)) |
| I am 62+, I plan to stay in this home long term, and I can keep paying taxes and insurance | Start with free/low-cost HUD-approved HECM counseling before any application. Compare HECM vs single-purpose programs and a HELOC. Open section | Counseling is required for a HECM and covers alternatives (CFPB; FTC). (CFPB: who can get a reverse mortgage · FTC: Reverse mortgages · HUD housing counseling) |
| I need cash mainly for property taxes or a specific repair | Ask your Area Agency on Aging about single-purpose reverse mortgages or tax deferral/postponement programs before a HECM. Open section | FTC: single-purpose loans are often the least expensive when you qualify. (FTC: Reverse mortgages) |
| I might move to assisted living or sell within a few years | Be cautious: upfront costs can make short stays expensive. Run numbers with a counselor; consider selling/downsizing first. Open section | FTC: fees can be more expensive if you stay a short time or borrow a small amount. (FTC: Reverse mortgages · CFPB: reverse mortgage costs) |
| Someone is pressuring me to buy an annuity or other product with reverse-mortgage money | Walk away. You do not have to buy other products. Call a HUD counselor and report at ReportFraud.ftc.gov. Open section | FTC warns against pressure to buy unsuitable products with proceeds. (FTC: Reverse mortgages) |
| I want my heirs to keep this home | Talk with heirs now about paying off the balance or selling. Confirm non-recourse / 95% appraisal sale rules with a counselor. Open section | CFPB: heirs must pay the full balance to keep the home; sale at ≥95% of appraised value can satisfy a larger balance. (CFPB: heirs keep or sell · FTC: Reverse mortgages) |
| I am not sure I can keep up taxes, insurance, or repairs | Do not take a reverse mortgage until a counselor and your budget show you can meet property charges (or a set-aside). Missing them can force repayment. Open section | CFPB/OCC: you must have resources (or a set-aside) for ongoing property charges. (CFPB: who can get a reverse mortgage · OCC HelpWithMyBank: HECM requirements) |
Sources: CFPB: who can get a reverse mortgage · FTC: Reverse mortgages · CFPB: reverse mortgage costs · HUD housing counseling · CFPB: heirs keep or sell.
Check what is true for you. This only counts boxes — it does not estimate proceeds, approve a loan, or pick a lender. Principal limits need a counselor/lender using current HUD factors.
A reverse mortgage lets homeowners age 62 or older borrow against home equity. Unlike a regular mortgage, you generally do not make monthly loan payments while you live in the home as your principal residence and keep up other obligations. Interest and fees are added to the loan balance, so the balance usually grows over time (FTC; CFPB).
Most reverse mortgages today are Home Equity Conversion Mortgages (HECMs). HECMs are insured by the Federal Housing Administration (FHA), part of HUD. FHA insurance is designed so you receive the advances you were promised and so the lender is protected if the loan balance exceeds the home's value — it is not homeowner insurance (FTC; CFPB).
Sources: FTC: Reverse mortgages · CFPB: Considering a reverse mortgage (2025) · CFPB: who can get a reverse mortgage.
Sources: CFPB: who can get a reverse mortgage · OCC HelpWithMyBank: HECM requirements · 24 CFR Part 206 (HECM) · FTC: Reverse mortgages · HUD housing counseling.
How much you can borrow (the principal limit) depends on age, interest rate, and home value — older borrowers, higher-value homes, and lower rates generally mean a higher limit. For couples, the youngest co-borrower (or eligible non-borrowing spouse) sets the age used (CFPB).
| Option | What CFPB says |
|---|---|
| Line of credit (adjustable rate) | Borrow only what you use; interest and fees apply to amounts drawn. Unused credit can grow over time (credit line growth). Can be combined with monthly payouts (CFPB). |
| Monthly payout — tenure or term (adjustable rate) | Fixed monthly amounts: tenure (as long as you maintain the reverse mortgage and stay within the mortgage limits) or term (for a set number of years). Can be combined with a line of credit (CFPB). |
| Lump sum (fixed rate) | Take available funds at once. Often a lower total available amount than other options; you pay interest and fees on the full amount drawn; no credit line growth; higher risk of outliving the funds if you are younger (CFPB). |
Source: CFPB: payment options. First-year how-much-you-can-draw rules also apply on HECMs — ask your counselor; this page does not invent a proceeds estimate.
CFPB: a reverse mortgage is typically more expensive than other home loans. You can often pay upfront costs from loan proceeds, which leaves you less cash to use (CFPB).
| Cost | Published fact |
|---|---|
| HUD-approved counseling fee | Varies by agency and your situation. Agencies may charge a reasonable fee but cannot charge if you cannot afford it; they must explain charges before counseling (CFPB costs page, reviewed May 28, 2024). (CFPB: reverse mortgage costs) |
| Origination fee | CFPB: origination fees of $6,000 or less, paid to the lender (reviewed May 28, 2024). (CFPB: reverse mortgage costs) |
| Closing costs | Third-party costs can include appraisal, title search, surveys, inspections, recording fees, mortgage taxes, credit checks, and other fees (CFPB). (CFPB: reverse mortgage costs) |
| Initial FHA mortgage insurance premium (MIP) | HUD Mortgagee Letter 2017-12: initial MIP is 2.00% of the Maximum Claim Amount for HECMs with FHA case numbers assigned on or after Oct. 2, 2017. CFPB lists an initial MIP among upfront costs (without restating the percent on that Ask CFPB page). (HUD Mortgagee Letter 2017-12 (MIP) · CFPB: reverse mortgage costs) |
| Annual FHA MIP | HUD ML 2017-12 and CFPB (May 28, 2024): annual MIP equal to 0.50% of the outstanding mortgage balance (added to the balance over time). (HUD Mortgagee Letter 2017-12 (MIP) · CFPB: reverse mortgage costs) |
| Interest and servicing fees | Interest and lender servicing fees are typically added to the loan balance each month, so the balance grows (CFPB; FTC). (CFPB: reverse mortgage costs · FTC: Reverse mortgages) |
| 2026 HECM Maximum Claim Amount (national cap) | For FHA case numbers assigned on or after Jan. 1, 2026, the HECM maximum claim amount is $1,249,125 (HUD announcement for calendar year 2026; applies nationwide including special exception areas). This is a program cap, not what any one borrower receives. (HUD: 2026 HECM maximum claim amount) |
Origination, interest, closing, and servicing fees vary by lender; FHA MIP rates are set by HUD. Shop and ask for Total Annual Loan Cost (TALC) (FTC: Reverse mortgages).
While you live in the home you must still pay property taxes, homeowners (and flood, if applicable) insurance, and keep the home in good repair. You may also owe HOA fees. If you stop meeting these obligations, the loan can become due and payable and you could lose the home (CFPB; FTC; OCC).
Sources: CFPB: who can get a reverse mortgage · FTC: Reverse mortgages · OCC HelpWithMyBank: HECM requirements.
Sources: CFPB: heirs keep or sell · FTC: Reverse mortgages · CFPB: Considering a reverse mortgage (2025).
CFPB and FTC describe HECM reverse mortgages as non-recourse: when the loan is due and the home is sold, you (or your estate) generally cannot be required to pay more than the home is worth. FTC: check for a non-recourse clause. CFPB: if the home is worth less than the balance, heirs can sell for at least 95% of the appraised value and FHA mortgage insurance covers the rest (CFPB heirs Ask CFPB; FTC).
Sources: CFPB: heirs keep or sell · FTC: Reverse mortgages.
| Type | High-level difference |
|---|---|
| HECM (FHA-insured) | Most common. Federally insured; mandatory HUD-approved counseling; age 62+; can be used for any purpose. FTC: insurance protects the lender's ability to be repaid, not the homeowner like a homeowners policy (FTC; CFPB). |
| Single-purpose reverse mortgages | Offered by some state/local agencies or nonprofits for a stated purpose only (for example property taxes or home repairs). Often the least expensive option when available; eligibility often favors modest incomes. Ask your Area Agency on Aging (1-800-677-1116) (FTC). |
| Proprietary (private) reverse mortgages | From private lenders; may allow larger advances on high-value homes but can cost more and are less standardized than HECMs. Some proprietary lenders also require counseling. Shop carefully and compare Total Annual Loan Cost (TALC) (FTC). |
Source: FTC: Reverse mortgages.
Sources: CFPB: who can get a reverse mortgage · FTC: Reverse mortgages. Related: HELOC calculator · Refinance break-even · Mortgage calculator.
Source: FTC: Reverse mortgages. Also see elder & wire fraud facts.
No free Tennessee-specific HECM requirement beyond national FHA/HUD rules was verified for this page. Tennessee homeowners should still use HUD-approved counselors and may ask the Tennessee Housing Development Agency, local Area Agency on Aging, or county tax office about property-tax relief and repair programs. Check your state.
A Home Equity Conversion Mortgage is an FHA-insured reverse mortgage for homeowners 62 and older. You borrow against home equity; the balance usually grows as interest and fees are added. You generally do not make monthly loan payments while you live in the home and meet your obligations. Most reverse mortgages today are HECMs (CFPB; FTC).
Yes for a HECM. You must receive counseling from a HUD-approved reverse mortgage counseling agency before the loan. Find counselors via HUD (1-800-569-4287). Agencies may charge a reasonable fee but cannot turn you away if you cannot afford it (CFPB; FTC).
Typical upfront costs include an origination fee ($6,000 or less per CFPB), closing costs, and an initial FHA MIP. HUD ML 2017-12 sets initial MIP at 2.00% of the Maximum Claim Amount and annual MIP at 0.50% of the outstanding balance (effective for case numbers on or after Oct. 2, 2017). Interest and servicing fees are usually added to the balance. You still pay property taxes and insurance (CFPB; HUD).
For a HECM, CFPB and FTC describe non-recourse treatment: when the home is sold to repay the loan, the estate generally is not required to pay more than the home is worth. If the balance is higher, heirs can sell for at least 95% of the appraised value and FHA insurance covers the rest (CFPB; FTC).
No. This page republishes free public facts from HUD, CFPB, FTC, OCC, and the Code of Federal Regulations with dates. It does not recommend a lender or tell you to take or avoid a loan. Talk with a HUD-approved counselor and, if needed, a trusted advisor.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.