Reverse Mortgage Information: Be Informed
A reverse mortgage can be simply defined as money drawn from the equity of a home that can be used for other purposes. While that basic definition is accurate as far as it goes, several elements set this process apart from other equity loans — and there’s a lot more worth understanding. Reverse mortgages can be an important tool to help seniors plan for their financial future.
Contact us today to learn more about reverse mortgage requirements and to find out if a reverse mortgage is right for you.
There’s more than one kind — here’s what to know.
HECM (Standard)
A Home Equity Conversion Mortgage (HECM) is insured by the FHA and is the most common type of reverse mortgage in the United States. Homeowners who borrow through a HECM can choose to receive a line of credit, a single lump sum, or monthly payments, and the funds can be used at the homeowner’s discretion.
HECM for Purchase
The same government-insured product, used to buy a new primary residence instead of refinancing an existing one. You make a down payment — typically 45–65% of the purchase price — and finance the rest with a reverse mortgage. No monthly mortgage payments on the new home. This is one of the most underused options in senior real estate and something Jeff specializes in.
Learn more about HECM for PurchaseProprietary / Jumbo
The other major category is the Proprietary Reverse Mortgage (PRM). Two things set it apart: it is not insured by the FHA — instead it is backed by the private mortgage companies that offer it — and the HECM guidelines do not strictly apply, though most lenders follow the same standards as best practice. Because these are often used for higher-value homes, they are sometimes called Jumbo Reverse Mortgages.
Key points about the HECM
- The applicant must be 62 years of age (as long as one spouse is 62 or older, the other can be younger and still qualify).
- The borrower must continue to pay insurance, property taxes, and maintenance costs.
- Proceeds are often used to make retirement more comfortable and to add to retirement income.
- Payments are not due until the borrower moves from the home or passes away.
- The borrower will usually not have to repay an amount above the value of the home, even as interest compounds.
- Borrowers are required to complete a counseling session with an independent, HUD-approved counselor.
Qualifying for a Reverse Mortgage
The most basic qualification is age: the borrower must be at least 62. In addition, the home must be owned by the resident and be their primary residence. Income and credit are generally reviewed as well, but the main purpose is to confirm that the homeowner can maintain the home and keep property taxes current throughout the life of the loan. The best way to understand whether a reverse mortgage fits your situation is to speak with a knowledgeable professional.
- You are age 62 or older (or the youngest borrower on the title is 62+).
- The property is your primary residence — not a second home or investment property.
- You have sufficient equity in the home.
- You are current — or can become current — on property taxes, homeowners insurance, and any HOA dues.
- The property meets FHA standards (most single-family homes qualify, as do properties with up to four units if one is your primary residence).
- You complete a HUD-approved reverse mortgage counseling session before closing.
About the counseling requirement: HUD requires that all HECM borrowers complete an independent counseling session with a HUD-approved counselor before a loan can proceed. This is a consumer protection built into the program — not a sales step. The counselor is not affiliated with Citizens and has no stake in whether you proceed. Jeff will help you connect with a HUD-approved counselor when the time comes.
Your proceeds depend on four factors.
The amount you can access through a reverse mortgage is calculated based on:
Your home’s appraised value
The higher your home value, the more equity is available. Orange County homeowners often find their long-term equity positions them well — median OC home values have grown significantly over the past two decades.
Your age (or the youngest borrower’s)
The older you are at the time of the loan, the larger the proceeds available to you. This reflects the actuarial calculation behind HECM lending.
Current interest rates
Lower interest rates generally mean higher available proceeds. Rates are set weekly every Tuesday and can be locked for 60 days from your application date.
The FHA lending limit
The federal HECM lending limit sets the maximum home value that can be counted toward your proceeds calculation. For 2025, that limit is $1,209,750.
What can the funds be used for? There are no restrictions. Homeowners use reverse mortgage proceeds to eliminate existing mortgage payments, supplement retirement income, cover medical or long-term care costs, make home improvements, or simply build a financial cushion. How you use the funds is entirely your decision.
Proceeds are also based on the loan type and payment option you choose. Jeff can walk you through a personalized estimate during a free consultation.
A reverse mortgage lets your home work for you — without giving it up.
A reverse mortgage is a loan available to homeowners age 62 and older that allows you to convert part of your home’s equity into funds you can use however you choose — without selling your home or making monthly mortgage payments.
Unlike a traditional mortgage where you pay the lender each month, a reverse mortgage works in the opposite direction: the lender makes funds available to you. The loan balance grows over time as interest accrues, but repayment isn’t required until you leave the home, sell the property, or pass away. Your heirs can then repay the loan — typically by selling the home — and keep any remaining equity.
One important distinction: a reverse mortgage is not free money, and it’s not a government benefit. It is a loan — one secured by your home. The equity you access now reduces what remains in the home later. Understanding that trade-off clearly is the whole point of this page.
The obligations that keep your loan in good standing.
A reverse mortgage does not eliminate your obligations as a homeowner. These aren’t penalties — they’re the same responsibilities that come with any home you own.
We go through each of them in detail in every consultation, because we’d rather you understand all of this clearly now than be surprised later.
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Property Taxes
Continue paying property taxes — delinquency can trigger loan default.
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Homeowners Insurance
Maintain homeowners insurance — required for the life of the loan.
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HOA Dues
Pay HOA dues if applicable.
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Property Upkeep
Keep the property in reasonable condition — the home is collateral for the loan.
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Primary Residence
Continue living in the home as your primary residence — if you move out for more than 12 consecutive months (for example, to a long-term care facility), the loan becomes due.
Benefits of a Reverse Mortgage
Every homeowner’s situation is unique, but the general benefits can apply to almost anyone. Extra funds can enhance retirement overall — helping cover larger or unexpected expenses without high-interest borrowing, settling tax obligations, or helping relatives. Ultimately, how you use the proceeds is up to you, and talking with a reverse mortgage loan officer can help you determine the best plan for your financial future.
Take the next step.
Calculate Your Eligibility
See what your home equity could mean in real numbers. Our calculator gives you an estimate in under two minutes.
Try the Reverse Mortgage CalculatorTalk to Jeff
The calculator is a starting point. Jeff can show you the full picture — personalized to your home, your age, and your retirement goals.
Schedule a Free ConsultationJeff Krolosky · NMLS #483675 · 714 343 2643 · jkrolosky@clgmtg.com
