Reverse Mortgage Types
HECM vs. Proprietary Reverse Mortgage
Federally insured versus private 'jumbo' reverse mortgages.
[Placeholder copy — review before publishing. Not financial advice.]
Side by side
| Feature | HECM (FHA-insured) | Proprietary (Jumbo) Reverse Mortgage |
|---|---|---|
| Monthly payment required? | None required on the loan. | None required on the loan (terms vary by lender). |
| Can you stay in the home? | Yes, while loan terms are met. | Yes, while loan terms are met. |
| Age requirement | 62+. | Often 62+; some programs start at 55 in certain states. |
| Income & credit considerations | Financial assessment; mandatory HUD counseling. | Lender-specific underwriting. |
| How equity is accessed | Lump sum, tenure/term payments, growing line of credit. | Usually lump sum or line of credit; varies by product. |
| Repayment | Due at maturity event; non-recourse. | Due at maturity event; terms vary by lender. |
Advantages & drawbacks
HECM (FHA-insured)
Major advantages
- FHA insurance and consumer protections
- Growing line of credit
- Non-borrowing spouse protections
Major drawbacks
- FHA lending limit caps proceeds
- Mortgage insurance premiums
Proprietary (Jumbo) Reverse Mortgage
Major advantages
- Can exceed the FHA limit
- No FHA mortgage insurance
- May accept more condos
Major drawbacks
- Not federally insured
- Fewer standardized protections
- Rates may be higher
Who each option may fit
HECM (FHA-insured)
May fit if you…
- Home value within FHA limit
- Value federal protections
May not fit if you…
- High-value homes well above the FHA limit
- Condos not FHA-approved
Proprietary (Jumbo) Reverse Mortgage
May fit if you…
- High-value homes
- Condos that don't meet FHA approval
May not fit if you…
- Moderately valued homes where a HECM offers more protection
Questions to help you decide
- Is your home value above the FHA lending limit?
- Is your condo FHA-approved?
- How much do federal protections matter to you?
Bottom line: HECMs offer more standardized protections; proprietary loans may unlock more for high-value homes.
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