Types of Reverse Mortgages

Three reverse mortgage products are originated in the United States today. The federal Home Equity Conversion Mortgage (HECM), the HECM for Purchase (H4P) variant that uses the same program to buy a new home, and the privately-issued proprietary or jumbo reverse mortgage. A fourth category, the single-purpose reverse mortgage, survives in scattered state and local programs but is not a meaningful national option anymore. The HECM is the only one most readers will encounter; it accounts for the overwhelming majority of reverse-mortgage originations every year (Consumer Financial Protection Bureau, Reverse Mortgages, 2024).

Last reviewed 2026-10-12

What is a HECM?

The HECM is insured by the Federal Housing Administration and administered under HUD's Single Family Housing Policy Handbook. The youngest borrower must be 62 or older. The home must be the borrower's primary residence. Counseling from a HUD-approved agency is mandatory (HUD Handbook 4000.1, Section II.B.2). HUD requires a session of at least 60 minutes (HUD Handbook 7610.1) but sets no fixed fee. Each agency charges its own reasonable fee and must disclose it at intake; a borrower with income below 200% of the federal poverty level pays nothing at the session, though the agency may collect the fee at closing (HUD Mortgagee Letter 2011-09).

The principal limit (the maximum the borrower can draw) is set by a federal Principal Limit Factor table that takes three inputs: the youngest borrower's age, the home's appraised value (capped at the federal maximum claim amount), and the expected interest rate at closing (HUD Mortgagee Letter 2017-12). The maximum claim amount for FHA case numbers assigned on or after January 1, 2026, is $1,249,125 (HUD Mortgagee Letter 2025-22). A home appraised above the cap still uses the cap in the math, which is the structural reason private jumbo programs exist.

Payout choices: lump sum at a fixed rate, an adjustable-rate line of credit, a fixed monthly tenure payment for as long as a borrower lives in the home, a fixed monthly term payment for a chosen number of years, or a combination (HUD Handbook 4000.1, Section II.B.10). The HECM line of credit has a feature private products do not: the unused portion grows at the same rate the loan accrues interest. The line-of-credit guide covers the math.

Two HECM consumer protections are load-bearing. The loan is non-recourse: neither the borrower nor the heirs ever owe more than the home is worth at sale, even if the balance has grown past the value (24 CFR 206.125). And an eligible non-borrowing spouse can in many cases remain in the home after the borrower's death without the loan being called due, if they meet HUD's deferral conditions (HUD Mortgagee Letter 2015-15).

About 95% of reverse-mortgage originations in any given year are HECMs. When the press writes about reverse mortgages, this is the product.

What is a HECM for Purchase (H4P)?

The HECM for Purchase is the same federal product used to buy a home rather than to borrow against one the buyer already owns (typically a downsized property, a relocation home, or a single-story house better suited to aging in place). The buyer brings a down payment (usually 45% to 65% of the purchase price, depending on age and rate), the HECM funds the rest, and no monthly payment is due after closing (HUD Handbook 4000.1, Section II.B.5).

The same eligibility rules apply: age 62 minimum, counseling required, primary-residence occupancy within 60 days of closing. The principal limit is calculated from the purchase price (capped at the FHA limit), the youngest buyer's age, and the expected rate at closing. For a worked example and the cash-to-close formula, see the H4P calculator and the H4P pillar. H4P originations are a small fraction of total HECM volume.

What are proprietary and jumbo reverse mortgages?

Outside the FHA system, private lenders originate proprietary jumbo programs such as these:

• HomeSafe from Finance of America Reverse (NMLS #2285). Includes a Second-lien option that the other two programs do not offer.
• Longbridge Platinum from Longbridge Financial (NMLS #957935).
• SecureEquity from Mutual of Omaha Mortgage (NMLS #1025894).

Jumbo programs can admit borrowers as young as 55 in some states, not 62. That is seven years younger than the HECM minimum. States vary: Massachusetts, New York, and Washington raise it to 60 on at least one program; North Carolina and Texas hold the line at 62 for HomeSafe. The published cap is up to $4 million, which is a cap on the loan, not on the home's appraised value. The loan against a home worth more than that is still bounded at $4 million.

Jumbo programs carry no FHA mortgage insurance premium, neither the 2% upfront cost nor the 0.5% ongoing accrual, which lowers the ongoing cost. The trade is real: no federal non-recourse insurance, no HUD-supervised counseling requirement uniform across lenders, and no federally standardized rate disclosure. Each lender sets its own terms, so the three are not interchangeable: Longbridge Platinum, for example, has a Platinum Preserve option, on certain fixed-rate products, that sets aside 10–40% of the home's equity (Longbridge Financial, Platinum product page). A borrower whose home value sits well above the HECM ceiling can request quotes from each lender and compare them line by line. The jumbo pillar carries the full comparison; the calculator renders jumbo output as a bounded range from this site's own model, capped at the $4 million these lenders advertise, never a point estimate.

What is a single-purpose reverse mortgage?

A fourth historical category exists: the single-purpose reverse mortgage. These are small loans run by some state and local agencies, typically property-tax-deferral programs and home-repair loans. They are inexpensive, restricted to a single use named in the loan documents, and available only in the jurisdictions that fund them (HUD, Reverse Mortgages, 2024). Reverse Mortgage Funding's Equity Elite proprietary program stopped when RMF paused all new loans and filed for Chapter 11 in November 2022 (RMF first-day declaration, Bankr. D. Del.), and it does not belong on this list. The National Council on Aging keeps a state-by-state list of what is still operating. For a homeowner whose only need is to defer property taxes, the local single-purpose program may still be the cheapest path; for any broader use, the national HECM or jumbo programs are the only live options.

How do the three live programs compare side by side?

| | HECM | HECM for Purchase | Proprietary / Jumbo | |---|---|---|---| | Issuer | FHA-insured, HUD-administered | FHA-insured, HUD-administered | Private lenders (such as HomeSafe / Longbridge Platinum / SecureEquity) | | Minimum age | 62 | 62 | As young as 55 in some states (HomeSafe: 60 in MA/NY/WA, 62 in NC/TX) | | Use | Borrow against an owned home | Buy a new primary home | Borrow against an owned home | | Lending limit | Home value capped at $1,249,125 (2026) | Purchase price capped at $1,249,125 (2026) | Loan capped at up to $4 million | | FHA mortgage insurance | 2% upfront + 0.5% ongoing | 2% upfront + 0.5% ongoing | None | | Counseling | HUD-approved counselor required | HUD-approved counselor required | Lender-specific; not federally standardized | | Non-recourse | Yes (24 CFR 206.125) | Yes (24 CFR 206.125) | Contract-specific; not FHA-backed | | Payout shapes | Lump sum / LOC / tenure / term / combination | Lump sum at closing | Typically lump sum or LOC; varies by lender |

The figures in the lending-limit row come from HUD Mortgagee Letter 2025-22 (federal cap) and the three named jumbo lenders' own product pages (private cap). The non-recourse row is the load-bearing federal protection on HECMs; jumbo non-recourse depends on the lender's contract, not federal insurance.

Which one are most borrowers on?

The HECM. By a wide margin: roughly 95% of reverse-mortgage originations in any given year. The HECM for Purchase accounts for a small but stable share; jumbo programs serve the smaller population whose home value sits well above the $1,249,125 federal cap and who would lose meaningful borrowing capacity on a HECM. For most readers, the question "which type fits" reduces to one decision: HECM, unless the home value or purchase price exceeds the FHA cap by enough that a jumbo quote is materially better. A HUD-approved counselor can walk through the comparison without selling either side. The counseling guide covers what to expect.

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