Today’s post is about: Reverse Mortgages (HECM) — How Seniors Tap Home Equity Without Monthly Payments

What it is

A reverse mortgage lets homeowners (typically 62+) convert home equity into cash without making monthly mortgage payments. The most common type is the HECM (Home Equity Conversion Mortgage), which is FHA-insured.

Instead of you paying the bank each month, the loan balance generally grows over time (interest + fees), and it’s repaid later when a “maturity event” happens.

Who it’s for

Reverse mortgages can make sense for:

Homeowners 62+ who plan to stay in the home long-term
Retirees who are “house rich, cash flow tight”
Borrowers who want a backup cash reserve (often via a line of credit)
Seniors who want to pay off an existing mortgage and eliminate that monthly payment

The biggest rule

It must be your primary residence, and you still have to keep up with:

Property taxes
Homeowners insurance (and flood insurance if required)
Basic home maintenance

Not paying these can cause the loan to become due.

How you can receive the money

With a HECM, funds are typically available as:

Line of credit (use what you need, when you need it)
Monthly payments
Lump sum (often less flexible / program-specific)
Or a combo

Pro tip people don’t realize: with a HECM line of credit, the unused portion can grow over time (it’s tied to the loan’s rate mechanics), so your available borrowing power may increase.

“How much can I get?”

It depends on your age, home value, and interest rates (older borrower + higher value generally = more available).

For 2026, the FHA/HECM maximum claim amount is $1,249,125 (nationwide) for case numbers assigned on/after January 1, 2026.

The protection most families care about: non-recourse

HECMs are non-recourse, meaning you (or your heirs) generally won’t owe more than the home is worth when it’s time to repay—no other assets are required to repay the debt.

When it gets repaid (the “maturity events”)

A reverse mortgage usually becomes due when:

The last borrower dies
The home is sold or title is transferred
The borrower moves out / no longer uses it as the primary residence
The borrower is out of the home for 12+ months (often due to health)
Or the borrower doesn’t meet ongoing obligations (taxes/insurance/maintenance)

If the borrower passes away, the loan typically must be repaid—often by selling the home—but heirs may have options depending on circumstances.

Required counseling (built-in consumer protection)

Before moving forward with a HECM, borrowers must complete HUD-approved counseling and receive a counseling certificate.

Pros / cons in plain English

Pros

No required monthly mortgage payment
Can improve retirement cash flow
Non-recourse protection (limits downside for heirs)

Cons

Upfront costs/fees can be meaningful (often better if you’ll stay longer)
Loan balance grows over time (less equity later)
You must stay current on taxes/insurance/maintenance

Process (high level)

Confirm eligibility (age/occupancy/property)
Complete HUD counseling
Apply + financial assessment (ability to handle taxes/insurance)
Appraisal + underwriting
Close + choose your payout option (LOC/monthly/lump sum)

Bottom line

A reverse mortgage can be a powerful tool when it fits the plan—especially for seniors who want to age in place and unlock equity responsibly. The key is understanding the ongoing obligations, the long-term cost, and how repayment works for the family.

Since 2023, Josh Dan has been a licensed loan officer. He takes complex finance and makes it simple, helping borrowers understand their options and make smart decisions. Connect at joshuadan.com.

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