What Is a Reverse Mortgage?

A Home Equity Conversion Mortgage, or HECM, is the most common reverse mortgage. The Consumer Financial Protection Bureau says it is a special home loan only for homeowners who are 62 and older, and that the Federal Housing Administration, part of the Department of Housing and Urban Development, insures HECMs. This page describes that program. It is not an application and it does not quote a principal limit.

By the YourHomeCosts editorial desk. Last updated October 19, 2026. General information, not personal advice.

Educational information only. This is not financial, tax, legal, lending, insurance, or appraisal advice. Loan documents, state law, and your servicer or assessor control. Confirm every figure before you act.

You still own the home

The CFPB’s reverse mortgage page, last reviewed August 28, 2026, says a reverse mortgage, like a traditional mortgage, uses the home as security, and the title stays in your name. Unlike a traditional mortgage, borrowers do not make monthly mortgage payments. Interest and fees are added to the balance each month, so the balance grows and equity falls. The loan is repaid when the borrower no longer lives in the home. It is not free money. The CFPB writes the relationship as borrowed money, plus interest, plus fees, equals a rising balance.

Homeowners must still pay property taxes and homeowners insurance, live in the property as their principal residence, and keep the house in good condition. Failing at those duties can lead to foreclosure. The CFPB page on when the loan is due says a HECM must be paid off when the last surviving borrower or eligible non-borrowing spouse dies, sells the home, or no longer lives there as a principal residence. If you are away for more than 12 consecutive months in a healthcare facility and no co-borrower lives in the home, people living with you have to move unless they can repay the loan or qualify as an eligible non-borrowing spouse.

Who can get a HECM

HUD Handbook 4235.1, chapter 1, says eligible borrowers are persons 62 years of age or older. The CFPB’s eligibility page, last reviewed August 28, 2026, says the same age limit and adds the other gates: the home is your principal residence; you own it outright or can pay off the existing mortgage at closing with your own funds or with HECM funds; you cannot owe federal debt such as federal income taxes or federal student loans, though HECM funds may be used to pay that debt; you have money, or you set aside HECM funds, for taxes, insurance, maintenance, and repairs; and the home meets property standards.

The same page says you must receive counseling from a HUD-approved reverse mortgage counseling agency, covering eligibility, the financial implications, and other alternatives. The CFPB also says the Department of Veterans Affairs does not offer reverse mortgage loans, and that some ads imply a VA approval that is not real.

What you or your heirs repay

The CFPB page on whether the lender owns the home says that if you move out, sell, or the last surviving borrower or eligible non-borrowing spouse dies, the HECM has to be repaid, and you will never owe more than the value of the house. HUD’s handbook describes the HECM as non-recourse: the borrower or estate will never owe more than the loan balance or the value of the property, whichever is less, and no assets other than the home must be used to repay the debt.

The CFPB page for heirs, last reviewed August 28, 2026, says that after a due-and-payable notice, heirs have 30 days to buy, sell, or turn the home over to the lender, and that the timeline might be extended up to six months. If there is no co-borrower and no eligible non-borrowing spouse, heirs who want to keep the home pay the full loan balance. To sell when the balance is higher than the value, they repay the full balance or at least 95 percent of the appraised value. The CFPB says mortgage insurance covers the rest. If the home is worth more than the balance, heirs can sell, repay the loan, and keep the difference.

A HECM is not a HELOC

A HELOC usually requires payments during the draw. A HECM does not require a monthly principal-and-interest payment, and the balance goes up. The CFPB lists a home equity loan or a line of credit as alternatives that might cost less and that usually do have monthly payments, with their own risk to the home. Those loans are explained on the HELOC and home equity loan page. A payoff statement for a reverse mortgage is one of the cases where Regulation Z allows a reasonable time rather than the seven-business-day limit.

This page does not state a mortgage-insurance percentage, a maximum claim amount, or a principal limit. Those figures depend on the HUD rules and the loan in front of you, and they are not copied here unless a cited page states the number this text uses.

Questions people ask

What is a HECM?

A Home Equity Conversion Mortgage is the most common reverse mortgage. The CFPB says FHA, part of HUD, insures it, and that it is only for homeowners 62 and older. You keep title. You do not make a monthly mortgage payment. Interest and fees are added to the balance.

Do I still pay taxes and insurance on a reverse mortgage?

Yes. The CFPB says you must pay property taxes and homeowners insurance, use the home as your principal residence, and keep it in good condition. Failing to do that can put the loan in default.

Will my heirs owe more than the home is worth?

The CFPB says you will never owe more than the value of the house. If heirs sell and the balance is higher than the value, the CFPB says they can repay by selling for at least 95 percent of the appraised value, with mortgage insurance covering the rest. HUD’s HECM handbook calls the loan non-recourse.

Sources checked October 19, 2026

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