Reverse Mortgage
Education Center
Empowering and guiding homeowners
62+ with knowledge to make
informed Financial Decision.
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Reverse vs. Forward
You keep the title
Repayment
Getting Started with Reverse Mortgages
What it is
HECM (Home Equity Conversion Mortgage)
The federally-insured reverse mortgage.
Proprietary (“jumbo”) reverse mortgages
Private-label loans beyond the FHA limit.
Key Facts
- Available to homeowners 62 or older.
consumerfinance.gov
- Must be your principal residence.
-
2025 lending limit (Maximum Claim Amount): $1,209,750. hud.gov
- Higher home-value cap, but no FHA insurance.
- Fees and protections vary by lender; read the fine print.
Costs & Safeguards
| Cost Bucket | Typical Amounts | Who it Protects |
|---|---|---|
| Up-front FHA Mortgage Insurance Premium (MIP) | 2% of the home value (up to the $1.21 M limit) | Ensures you or your heirs never owe more than the home is worth. hud.gov
|
| Annual MIP | 0.5% of the outstanding loan balance |
Keeps the insurance fund solvent. hud.gov
|
| Origination fee | 2% of first $200k + 1% above, capped at $6,000 | Pays the lender for processing. consumerfinance.gov
|
| Third-party closing costs | Appraisal, title, recording, etc. | Standard real-estate fees. |
| Interest & servicing fees | Accrue onto the balance (no monthly bill) | Compensate the lender/servicer. |
Built-in safeguards
Non-Recourse
Guarantee
Mandatory HUD-Approved Counseling Before You Can Apply.
Cooling-Off Period After Counseling So You Can Compare Offers.
How the Loan Works
Get a Detailed Estimate
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Real - Time Stories
Travelling the world
How a couple used a HECM line of credit to fulfill their dreams to travel the world.
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Covering Medical Expenses
Sarah’s story of covering her medical expenses using HECM line of credit.
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Renovating their house
A tale of a owner who renovated and made it accessible for their growing age with the help of HECM.
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Helping Grandchildren with their Dreams
How Michael helped his grandchildren by covering their college tuition with the help of HECM.
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Fulfilling Dreams of Owning a Bakery
A tale of how Betty known for her pies, opened her own bakery with the help of HECM.
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Buying a Vehicle
How Bill & Sandy were able to afford their RV and travel wherever they wanted with the help of HECM.
Counseling & Next Steps
Find a HUD – approved counselor
Search by ZIP or call 800–569–4287.
Prepare for your session
Gather mortgage statements, tax bills, insurance declarations, and a recent utility bill.
Comparison – shop lenders
Request written “Loan Comparisons” and “Total Annual Loan Cost” disclosures.
Talk with family & advisors
A reverse mortgage affects heirs’ options.
Glossary & Resources
- Maximum Claim Amount (MCA) – FHA-set cap used to calculate available money ($1,209,750 for 2025). hud.gov
- Non-recourse loan – you or your heirs never owe more than 95% of the home’s value. consumerfinance.gov
- Principal Limit – the pool of funds available, based on age, rates, and MCA.
- Key links:
- HUD HECM page (program rules & counselor lookup)
- CFPB Reverse-Mortgage FAQ and cost worksheets
- AARP Reverse Mortgage Education Project
Important Disclaimers*
- This site is education and not a loan offer nor legal/financial advive.
- Reverse-mortgage proceeds may affect and other need-based programs-consult a benefits specialist
- Rates, limits and rules can change.Information is current as of July 2,2025; check HUD OR CFPB for updates