What Makes HECM Different from Other Reverse Mortgages
The defining feature of a HECM is FHA mortgage insurance. This protects: (1) borrowers — ensuring loan continues even if lender fails, (2) heirs — you never owe more than the home's value at repayment, and (3) lenders — against losses when loan balance exceeds home value. This protection costs 2% upfront + 0.5% annually.
HECMs are non-recourse loans — neither you nor your heirs can owe more than 95% of the home's appraised value at time of repayment, even if the loan balance has grown to exceed home value. This is the FHA insurance at work. Without it (proprietary reverse mortgages have their own protections, but they vary).
A lesser-known HECM variant that allows seniors 62+ to purchase a new home using a reverse mortgage — making a down payment and covering the rest with a HECM. No monthly mortgage payments on the new home. Useful for seniors downsizing or relocating who want to use equity from selling their old home without monthly payment obligations on the new one.
| HECM Feature | 2026 Detail |
|---|---|
| FHA lending limit | $1,149,825 (max home value for calculation) |
| Minimum age | 62 years |
| MIP | 2% upfront + 0.5% annual |
| Non-recourse | Yes — 95% of appraised value max at repayment |
| Counseling required | Yes — HUD-approved counselor |
| Origination fee cap | $6,000 |
| Eligible properties | Primary residence; single-family, approved condo, 2–4 unit owner-occupied, manufactured post-1976 |
Frequently Asked Questions
$1,149,825 — this is the maximum home value used in the HECM principal limit calculation. If your home is worth more than this, the excess equity above $1,149,825 is not factored into your available loan amount. For homes significantly above this limit, a proprietary (jumbo) reverse mortgage may allow access to more equity.
Typically 30–60 days from application — longer than a traditional mortgage due to the mandatory HUD counseling (which must precede the application), appraisal, FHA review, and additional compliance steps. Plan for at least 45 days. Some lenders can complete the process faster for straightforward applications.