San Diego County Reverse Mortgage Guide

Other Ways to Access Your Home Equity in San Diego County

A reverse mortgage is one option among several, and which one fits depends on the household.

• A budget and benefits check. This looks at spending and at benefits not yet claimed. It costs nothing in equity but may not close a large gap.
• Property tax relief. The San Diego County Assessor administers the Homeowners' Exemption, which reduces assessed value by $7,000 (Revenue and Taxation Code section 218) and, the Assessor says, saves about $70 (Assessor). The claim is filed once and stays in place for as long as the owner lives in the home as a principal residence; the Assessor names February 15 as the regular filing deadline.
• State tax postponement. The Assessor notes that San Diego County does not offer its own postponement program but shares the State Controller's (Assessor). The Controller lists criteria including at least 40 percent equity in the home (Revenue and Taxation Code section 20583(e)(1)) and an annual household income of $57,002 or less, among other requirements; the program's 2026-27 filing period runs from October 1, 2026 to February 10, 2027 (SCO). Postponed taxes are a lien that must be repaid, at 5 percent simple interest per year, funding is limited, and a homeowner with a reverse mortgage does not qualify (SCO fact sheet).
• Help from family. It keeps the home intact but can strain relationships and is best written down.
• Selling or downsizing. This frees equity but ends ownership of that home. The Assessor describes a Proposition 19 program letting owners 55 or older transfer their assessed value from their current primary residence to a replacement primary residence when certain conditions are met.
• A home equity loan or line of credit (HELOC). These usually have monthly payments, and qualifying depends on income and credit.
• A cash-out refinance. This replaces the current mortgage with a larger one, also with monthly payments.

How a HECM Works in California — Requirements and Process

Eligibility comes first. Under 24 C.F.R. § 206.33, the youngest borrower must be 62 or older at the time of loan closing. The home must be the principal residence of each borrower, and of any eligible non-borrowing spouse, at closing under 24 C.F.R. § 206.39.

Federal law, 12 U.S.C. § 1715z-20(d), adds that the home must be a dwelling designed principally for a 1- to 4-family residence where the borrower occupies one unit, and that the borrower must have received counseling from an independent third party not associated with the lender or with anyone selling annuities, investments or insurance. To find a reverse mortgage counselor nearby, HUD says to search its HECM Counselor Roster or call (800) 569-4287 (HUD).

California adds its own steps. Civil Code section 1923.5 generally bars a lender from taking an application until the applicant has received a plain-language notice that tells the applicant counseling with an independent counselor is required, and a state worksheet guide to bring to the session. Before accepting a final and complete application, the lender must give the borrower a list of not fewer than 10 HUD-approved reverse mortgage counseling agencies, and it may not accept that application, or charge the applicant any fees, until seven days have passed from the date of counseling (Civil Code section 1923.2(j) and (k)).

The usual path runs from counseling, to application, appraisal, underwriting and closing. Under 12 U.S.C. § 1715z-20(d)(9), payment can come as a line of credit, monthly payments for a set term or for as long as you live in the home, a combination, or another basis HUD approves. HUD says the amount available depends on factors including the youngest borrower's age and the lesser of appraised value, the HECM FHA mortgage limit or the sales price; HUD publishes the current limit.

Costs, Fees, and Why the Loan Balance Keeps Growing

Cost is often the part advertising skips. The main charges are an origination fee (the lender's charge for making the loan), an upfront mortgage insurance premium, other closing costs, an ongoing annual mortgage insurance premium, servicing fees and interest. Civil Code section 1923.2 allows fees at closing, periodically or at maturity.

The upfront costs can be paid in cash or from the loan itself; paying from the loan means no money is brought to closing but less is left to spend, and ongoing costs are added to the balance each month (CFPB). As the balance grows, equity shrinks.

Federal law requires HUD to set limits on the origination fee, and the fee may be fully financed into the loan (12 U.S.C. § 1715z-20(r)). A limit is a ceiling, not the amount any borrower pays. HUD publishes current premium and limit figures.

Two disclosures help you see the trend. Before closing, the lender must show the projected total cost of the loan, and each year, by January 31, a statement of what was paid out, interest added and the balance owed, under 12 U.S.C. § 1715z-20(e). The FTC guide suggests asking your counselor to compare how payment options and fees affect total cost over time.

What Happens to Your Home — During the Loan and After

For families, this is often the heart of it. During the loan you keep title; the lender holds a lien, a legal claim against the home securing the debt.

The bills stay yours. San Diego County secured property taxes come in two installments: the first due November 1 and penalized if unpaid by December 10, the second due February 1 and penalized if unpaid by April 10 (Treasurer-Tax Collector). If both installments are not paid by June 30, the unpaid taxes go into default. Defaulted taxes can be paid through the Treasurer-Tax Collector's five-year payment plan, which may be available to taxpayers in default for less than five years but not to those late on their current-year taxes (Treasurer-Tax Collector). Under 24 C.F.R. § 206.27, with HUD's approval the loan can be called due if, among other events, the borrower does not provide for paying property charges, another obligation of the borrower under the mortgage is not performed, or for longer than 12 consecutive months a borrower does not live in the home because of physical or mental illness and it is not the principal residence of at least one other borrower.

When the last borrower dies, the balance becomes due. A spouse not on the loan may be able to stay under 24 C.F.R. § 206.55, but only if named as an eligible non-borrowing spouse at closing, still living there, and, within 90 days of the death, establishing a legal right to remain, among other conditions. Heirs may sell: the regulation says nothing in it interferes with the estate's or heirs' ability to dispose of the property if they are otherwise legally entitled to do so. Federal law also says the homeowner is not liable for any shortfall between the debt and what the home's sale brings, the "non-recourse" rule in 12 U.S.C. § 1715z-20(d)(7). Equity left after repayment is possible, never assured.

Canceling or Reversing a Reverse Mortgage

Second thoughts are normal after signing something this large. With most reverse mortgages, the CFPB says, you can cancel within three business days after closing for any reason, without penalty, which is called the right of rescission.

After that, the loan can be paid off in whole or in part at any time without penalty under 12 U.S.C. § 1715z-20(d)(4), and Civil Code section 1923.2 says the same for California reverse mortgages. Paying it off in full ends the debt, and the home stays yours.

A HECM can also be refinanced into a new HECM under 12 U.S.C. § 1715z-20(k), which requires the lender to give a good-faith estimate of the refinancing's total cost and how much the borrowing limit rises.

Knowing you can cancel or pay off the loan gives you room to think clearly after closing.

Who to Talk to About a Reverse Mortgage in San Diego County

Sorting through this alone, or for a parent, is a lot. The first conversation the law builds in is with a HUD-approved counselor, who must cover options other than a HECM, the financial implications, and that a HECM may have tax consequences, affect eligibility for federal and state programs, and affect your estate and heirs, under 12 U.S.C. § 1715z-20(f). The CFPB notes you can talk with a counselor while still only considering a loan, and suggests telling the counselor about anything a lender recommended or tried to sell (CFPB).

Other professionals have different roles. A tax adviser can address your own tax picture; the FTC says proceeds are typically tax-free and won't affect Social Security or Medicare benefits. An estate planning attorney can say how the home fits a will or trust. A financial planner can look at income and spending as a whole. You never have to buy an annuity or other product to get a reverse mortgage, as Civil Code section 1923.2 and the FTC both state.