Reverse Mortgages in Illinois

In Illinois, a homeowner 62 or older can convert part of their home equity to cash through a HECM reverse mortgage. Here's how the math works, what Illinois adds to the federal rules, and where to find a counselor.

Illinois layers a dedicated Reverse Mortgage Act (765 ILCS 945) atop the federal HECM rules, giving the state one of a small number of separate reverse-mortgage statutes in the country. About 16.7% of Illinois residents are 65 or older (U.S. Census Bureau, American Community Survey 5-year estimates 2018–2022), with retiree concentration in Cook County's older suburbs, the collar counties, and downstate metros including Peoria and Rockford.

The 2026 federal HECM lending limit of $1,249,125 applies in Illinois (HUD Mortgagee Letter 2025-22). For the structural basics of the product, see what a reverse mortgage is and how it works.

Last reviewed 2026-05-26

What reverse mortgage rules are specific to Illinois?

Illinois has a state Reverse Mortgage Act (765 ILCS 945). A lender must deliver a state-prescribed IDFPR disclosure form to the applicant before the borrower signs, and must document HUD-approved counseling completed within the federal 180-day certificate window.

Lender and originator oversight: IDFPR Division of Banking. Originator licenses are verifiable through NMLS Consumer Access.

No state mortgage tax. Recording fees in Cook County run roughly $98 per document; collar counties run $52 to $80; the state RHSP surcharge applies. There is no percentage-based state mortgage tax on the loan amount.

Surviving non-borrowing spouse. Illinois applies the federal HUD ML 2015-15 deferral framework through the loan note. The Reverse Mortgage Act does not codify a separate state-level surviving-spouse protection.

Predatory-lending overlay (rare). Reverse mortgages are typically not "high-risk home loans" under the Illinois High-Risk Home Loan Act, but the statute applies where its triggers are met.

How much can you borrow with a reverse mortgage in Illinois?

Illinois home values are mixed: Chicago's North Shore and select downtown lakefront submarkets push against the $1,249,125 federal HECM cap, but most of the state (including outer Cook County, the collar counties, and downstate metros) sits well below. For a typical 70-year-old Illinois borrower with a paid-off home appraised at $310,000, the principal-limit factor at current HECM rates returns roughly 48–54% of value before closing costs, producing a range in the high $140,000s to high $160,000s (a planning estimate, not a quote).

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For how Illinois ranks against the other 50 jurisdictions on standard-HECM fit, see the Illinois suitability score.

Do you need counseling for a reverse mortgage in Illinois?

Every Illinois HECM borrower completes a HUD-approved counseling session before the lender may accept the application. The Illinois Reverse Mortgage Act references the federal HUD counseling certificate as part of the lender's documentation obligation. Sessions run 60–90 minutes and cost $125–$200, with fee waivers available for borrowers under the income threshold the agency publishes. Phone sessions are the default; in-person sessions are available in Chicago and several downstate metros.

Find an Illinois-authorized counselor on the HUD HECM Counselor Roster or call 1-800-569-4287. Chicago metro generally schedules within 1–2 weeks; smaller downstate metros can run longer.

Will my heirs be on the hook?

A HECM is non-recourse: your heirs and your estate will never owe more than the home is worth at the time of sale, even if the loan balance has grown past the home's value (12 USC §1715z-20). For the heir-side timeline and the four disposition options, see reverse mortgage due and payable.

What does the borrower still have to pay?

The FHA-insured HECM is a loan, not a benefit. It removes the monthly principal-and-interest payment but does not remove the borrower's other obligations. The Illinois Reverse Mortgage Act disclosure form covers these explicitly. Throughout the life of an Illinois HECM the borrower must:

• Keep property taxes current. Illinois county collectors bill in two annual installments, on a schedule that varies by county (Cook County is typically March 1 and August 1). Non-payment is a property-charge default under the HECM note.
• Maintain homeowners insurance. Standard hazard coverage; flood insurance where applicable for properties in FEMA Special Flood Hazard Areas along the Mississippi, Illinois, and Fox river corridors.
• Occupy the home as a primary residence. Moving out for more than 12 consecutive months triggers the loan's due-and-payable clause.
• Keep the home in reasonable repair. Significant deferred maintenance can constitute a property-charge default.

These obligations are federal and apply identically in every state. The Illinois disclosure form draws explicit attention to them at the application stage.

What about jumbo in Illinois?

A modest share of Illinois properties appraise above the $1,249,125 federal HECM cap: primarily Chicago's downtown lakefront (Streeterville, the Gold Coast, Lincoln Park, Lakeview East), the North Shore (Wilmette, Winnetka, Kenilworth, Lake Forest), and select western-suburb submarkets (Oak Brook, Hinsdale, Burr Ridge). For those, jumbo / proprietary programs (HomeSafe, Platinum Preserve, SecureEquity+) admit at age 55 in Illinois and extend the cap to $4M loan value. See the HECM vs. jumbo comparison.

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