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.

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?

For a 70-year-old Illinois borrower with a paid-off home appraised at an illustrative $310,000, the HUD principal-limit factor across a 6.0–7.5% expected-rate planning range returns roughly 35.0–41.5% of value before closing costs, about $109,000–$129,000 (an 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 session with a counselor on HUD's HECM Roster before the lender may process the application (HUD Handbook 4000.1), and FHA's list of HECM counseling agencies shows nine based in Illinois as of October 7, 2026. Two are in Chicago, and one is in each of Crystal Lake, Evanston, Homewood, Joliet, Skokie, Wheaton and Woodstock; each sets its own fee, and the HUD HECM Counselor Roster or 1-800-569-4287 also finds agencies that counsel by phone.

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?

For an Illinois home appraised above the $1,249,125 federal HECM cap, proprietary jumbo programs (Finance of America's HomeSafe, Longbridge Platinum, and Mutual of Omaha's SecureEquity) lend up to $4 million and are not FHA-insured. Mutual of Omaha's SecureEquity rate sheet lists Illinois among its approved states (Mutual of Omaha, SecureEquity brokered rate sheet effective September 9, 2026). Each lender sets its own state availability and minimum age, as young as 55 in some states (each lender's product page). See the HECM vs. jumbo comparison.

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