FAQ: Frequently Asked Questions About HECM Reverse Mortgages

A Home Equity Conversion Mortgage (HECM) is the most common type of reverse mortgage, insured by the Federal Housing Administration (FHA). It allows seniors aged 62 or older to convert part of their home equity into cash without having to sell their home or make monthly mortgage payments.
Learn more on our homepage where we explain how it works.

To be eligible, you must:
- Be 62 years of age or older
- Own the home outright or have a low mortgage balance
- Live in the home as your primary residence
Participate in HUD-approved counseling
Use our calculator to check your eligibility based on your age and home value.

The amount depends on:
- Your age
- Your home’s value (up to FHA limits)
- The current interest rate
- The type of payout you choose
Older borrowers with higher equity typically qualify for more. For an instant estimate, use our HECM Calculator.

No. With a HECM, you remain the legal owner of your home. However, you must continue to pay property taxes, homeowners insurance, and maintain the home in good condition.

No monthly payments are required. The loan balance is repaid when you sell the home, move out permanently, or pass away.

You can choose from:
- A lump sum
- Monthly payments (tenure or term)
- A line of credit
- A combination of the above
Each has different implications on how interest accumulates. See all payout options here.

It’s a flexible option that allows you to borrow as needed. The available credit grows over time, making it attractive for long-term planning.

It depends on the payout option. A tenure plan provides payments for life, while lump sum or line of credit options can be exhausted. Our calculator helps you visualize future balances.

Typical costs include:
- FHA Mortgage Insurance Premium (MIP): 2% upfront + 0.5% annually
- Origination fee
- Closing costs
- Servicing fees
These are often rolled into the loan. Use our tools to estimate exact costs.

TALC shows the projected annual average cost of a reverse mortgage over time. It includes interest, insurance, and fees—giving you a full cost picture.
More details in our Advanced Section.

A professional FHA-compliant home appraisal is required to determine the home’s market value and ensure it meets FHA guidelines. This affects your loan amount.

Equity is the value of your home minus what you owe. The more equity you have, the more cash you may be eligible to receive.

Yes. Failure to do so may result in loan default. These are critical obligations even with no mortgage payments.

Yes. If interest rates drop or your home value increases, you may refinance into a new HECM with better terms.

The loan becomes due. Typically, the home is sold to repay the balance. If your heirs want to keep the home, they must repay the loan (usually via refinance).

No. HECMs are non-recourse loans. Your heirs never owe more than the home’s appraised value—even if the loan balance is higher.

Yes. Common uses include:
- Paying off existing mortgages
- Healthcare expenses
- Home improvements
- Travel or retirement support

Yes. HECM for Purchase (H4P) allows you to buy a new primary residence using a reverse mortgage. You must pay a down payment from savings or the sale of your previous home.

- Single-family homes
- HUD-approved condos
- Certain multi-unit properties (2-4 units, if you live in one)
- Manufactured homes (if HUD-approved)

On average, 30–45 days. It involves counseling, appraisal, underwriting, and closing.

Yes. You must attend a HUD-approved counseling session before applying. This ensures you understand the program and its implications.

Right here ➜ Use the HECM Calculator to get your personalized reverse mortgage estimate in seconds — no registration required.