The HECM Loan
The HECM Loan
FHA Insured
HECM stands for Home Equity Conversion Mortgage. A HECM is the FHA insured reverse mortgage that allows qualified homeowners 62 and older to access part of the value of their home. Home equity can be accessed in a number of ways and enables greater cash flow to the borrower.
The HECM at a glance
- The FHA insured reverse mortgage
- For qualified homeowners 62 and older
- You keep ownership and title to your home1
- Your home and property are the only assets that secure the loan
- Independent HUD-approved counseling is required
Draw On Your Home's Value
Draw from your home without selling it
You live in a home that you've watched increase in value for years. You may find it difficult to keep up with bills and healthcare expenses. You're faced with a dilemma: sell the house, your home, which really doesn't have a price tag, or continue to live in it and watch your financial burden increase. Now imagine this dilemma resolved.
A reverse mortgage loan allows you to draw on a portion of the value of your home without having to sell it and may allow you to receive monthly cash flow payments. You can use the loan proceeds as you wish: to enhance and extend your retirement, make home improvements, pay bills, and more. It's all up to you.2
See How To QualifySound familiar?
My house has been my home for most of my life. I can't leave, but I can't afford to stay.
How FHA insurance protects you and your family
HECM loans are insured by the Federal Housing Administration (FHA). This insurance provides protections and peace of mind for borrowers and their children.
Never owe more than the home is worth
The borrower(s) are not required to pay more than the home's fair market value.
FHA covers the shortfall
If the loan balance exceeds the value of the home, FHA reimburses the lender for the difference when the estate sells the home.
Your payments are insured
Payments made to the borrower by the lender are insured by FHA. If the lender is unable to continue making payments, the payments would be made by FHA.
The lender cannot take title
If the loan balance grows and exceeds the home's present market value, the lender cannot take title. FHA ensures that borrowers can live in their home as long as basic loan obligations are met: homeowner's insurance in force, property tax payments current, and the home maintained in good condition.
About the Mortgage Insurance Premium (MIP)
FHA requires a Mortgage Insurance Premium (MIP) to be collected at closing and during the life of the loan. These premiums are charged to the borrower's loan balance. The upfront MIP is calculated using your home's appraised value or a maximum of $1,249,125 (the 2026 national HECM limit) and is charged at closing. The ongoing FHA insurance premiums are calculated using each month's outstanding loan balance.
Your Home
Working For You
Imagine living in your home without a traditional monthly mortgage payment,1 or instead, enjoying monthly loan proceeds from the years you've invested in your home.
HECM questions, answered
The basics every borrower and family should know.
When does the loan have to be repaid?
After you get a reverse mortgage on your primary residence, repayment is not due until the home is sold, the last borrower passes away, permanently leaves the home, or does not comply with the loan terms.
Borrowers also must keep the home in good condition, pay property taxes, and keep homeowner's insurance coverage to avoid the loan becoming due and payable.
Will I still own my home?
Yes. Reverse mortgage borrowers retain ownership and title to their home. It's yours just as it was before, but now you may benefit from the equity that's been building in your home for years. In addition, your home and property are the only assets that secure the loan.
What happens for my heirs?
In order to retain the home when the reverse mortgage becomes due, the heirs may choose to keep the home by paying 95% of the home's appraised value, less customary closing costs and real estate commissions.
Is counseling required?
Yes. As a protection, all those seeking a reverse mortgage are required to obtain counseling from an independent HUD-approved third party counselor prior to incurring any costs associated with the loan, other than the counseling fee.
Are the proceeds taxable?
While proceeds from a reverse mortgage are not subject to personal income taxation, borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal.2
Where can I find the HECM guidelines?
For HECM guidelines, please view my reverse mortgages page.
Ready To Learn
More About HECM?
I'll talk you through each step of the process and answer any and all questions you may have.
1This advertisement does not constitute financial advice. Please consult a financial advisor regarding your specific situation. There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrowers are still responsible for paying property taxes, homeowner's insurance and maintaining the property to HUD standards. Failure to do so could make the loan due and payable. Credit is subject to age, income standards, credit history, and property qualifications. Program rates, fees, terms, and conditions are not available in all states and subject to change.
2Borrowers should seek professional tax advice regarding reverse mortgage proceeds.