Proprietary Reverse Mortgages 2026: Jumbo Options for High-Value California Homes
If your home is worth more than the FHA lending limit of $1,209,750, a proprietary (jumbo) reverse mortgage may unlock significantly more equity than a standard HECM. These private reverse mortgages are designed specifically for high-value properties in markets like California, where home values often exceed federal limits.
Proprietary Reverse Mortgages at a Glance
- Also Called: Jumbo reverse mortgage
- Best For: Homes $1M+ value
- Loan Amounts: Up to $4M+
- Age: Typically 55-62+ (varies)
- FHA Insurance: No (private programs)
- Counseling: State-dependent
- Non-Recourse: Yes (most programs)
- Monthly Payment: None required
What Is a Proprietary Reverse Mortgage?
A proprietary reverse mortgage is a private-sector alternative to the government-insured HECM (Home Equity Conversion Mortgage). While HECMs are backed by the Federal Housing Administration with a maximum claim amount of $1,209,750 in 2026, proprietary reverse mortgages are offered by private lenders and can accommodate home values up to $10 million or more.
These products are sometimes called "jumbo reverse mortgages" because they serve borrowers whose home values exceed what HECM can efficiently address. In high-cost markets like Orange County, San Francisco, Seattle, and other California and Washington metro areas, many homeowners have equity well beyond HECM limits.
Why "Proprietary"?
The term "proprietary" means these loans are the property of the lending institution— they're not standardized government products. Each lender may have different terms, rates, and qualification requirements. This contrasts with HECM, which is standardized across all lenders under FHA guidelines.
HECM vs. Proprietary Reverse Mortgage: Key Differences
| Feature | HECM | Proprietary |
|---|---|---|
| Backing | FHA insured | Private lender |
| Max Home Value | $1,209,750 (2026) | $10M+ (varies) |
| Minimum Age | 62 years | 55-62 (varies) |
| FHA MIP | 2% upfront + 0.5% annual | None |
| Origination Fee | FHA capped | Varies by lender |
| Counseling | Federally required | State dependent |
| Non-Recourse | Yes (FHA insured) | Yes (most programs) |
| Payout Options | Lump, line, term, tenure | Usually lump sum |
| Interest Rates | Regulated, competitive | Generally higher |
| Best For | Homes under $1.5M | Homes $1.5M-$10M+ |
Who Should Consider a Proprietary Reverse Mortgage?
Proprietary reverse mortgages serve a specific segment of the senior population:
Owners of High-Value Homes
If your home is worth $1.5 million or more, a proprietary reverse mortgage may unlock substantially more equity than HECM. While HECM maxes out around $750,000 in proceeds (due to the $1,209,750 limit), a jumbo reverse on a $3 million home might provide $1.5 million or more.
California and Washington Homeowners
Coastal California and Seattle-area home values often exceed national averages significantly. A home purchased decades ago for $200,000 might now be worth $2-3 million. Proprietary reverse mortgages help these homeowners access the equity they've built in these high-appreciation markets.
Seniors Ages 55-61
Some proprietary programs accept borrowers as young as 55, five to seven years earlier than HECM's mandatory 62. For younger seniors in high-value homes who need to access equity before age 62, proprietary may be the only option.
Those Wanting Larger Lump Sums
If you need a large one-time payment—for medical expenses, helping adult children, or major purchases—proprietary reverse mortgages can provide larger lump sums than HECM's first-year disbursement limits allow.
When HECM Is Still Better
Even with high-value homes, HECM may be preferable when:
- ✓ Home value is under $1.5M (HECM provides similar proceeds with FHA protection)
- ✓ You want flexible payout options (line of credit, tenure payments)
- ✓ FHA insurance protection is important to you
- ✓ Lower interest rates are a priority
- ✓ You prefer standardized, federally regulated products
How Much Can You Get from a Jumbo Reverse Mortgage?
Loan amounts depend on your age, home value, and current interest rates. Generally, older borrowers qualify for higher loan-to-value percentages. Here's a general guide:
Estimated Proprietary Reverse Mortgage Proceeds
| Home Value | Age 65 | Age 70 | Age 75 | Age 80 |
|---|---|---|---|---|
| $1,500,000 | $525K-$600K | $600K-$675K | $675K-$750K | $750K-$825K |
| $2,000,000 | $700K-$800K | $800K-$900K | $900K-$1M | $1M-$1.1M |
| $3,000,000 | $1.05M-$1.2M | $1.2M-$1.35M | $1.35M-$1.5M | $1.5M-$1.65M |
| $5,000,000 | $1.75M-$2M | $2M-$2.25M | $2.25M-$2.5M | $2.5M-$2.75M |
*Estimates for illustration. Actual amounts vary by lender, rates, and individual circumstances.
Requirements for Proprietary Reverse Mortgages
While requirements vary by lender, common criteria include:
Age Requirements
Most programs require borrowers to be 60-62 years old, though some accept ages 55+. Higher loan amounts are available to older borrowers. If there are multiple borrowers, the youngest borrower's age typically determines qualification.
Home Value Minimums
Programs typically require minimum home values of $700,000 to $1,000,000. The most favorable terms are usually for homes valued $1.5 million and above, where the proprietary advantage over HECM becomes most significant.
Property Types
- Single-family primary residences
- Condominiums (may not need FHA approval)
- Townhouses
- Some 2-4 unit properties
- Certain vacation properties (limited programs)
Credit and Financial Assessment
Proprietary lenders conduct their own underwriting, which may include:
- Credit history review (specific scores vary)
- Verification of ability to pay taxes and insurance
- Assessment of current property liens
- Income/asset documentation (varies by program)
Counseling Requirements
HUD counseling is not federally required for proprietary reverse mortgages, but California law requires counseling for all reverse mortgages, including proprietary products. Washington has similar requirements. Even where not legally required, reputable lenders typically recommend counseling.
Advantages of Proprietary Reverse Mortgages
Higher Loan Amounts
Access significantly more equity from high-value homes—potentially $1 million+ more than HECM maximum.
No FHA Mortgage Insurance Premium
Save 2% upfront plus 0.5% annually that HECM borrowers pay for FHA insurance.
Younger Borrower Options
Some programs accept borrowers as young as 55, versus HECM's 62 minimum.
Condo Flexibility
Condos don't need FHA approval, expanding options for condo owners.
Faster Processing
Without FHA underwriting requirements, some proprietary loans close more quickly.
Disadvantages and Considerations
Higher Interest Rates
Proprietary rates are typically 0.5-1.5% higher than HECM rates.
Limited Payout Flexibility
Most proprietary programs offer only lump sum or limited line of credit—not the tenure/term options HECM provides.
No FHA Insurance Backing
While still non-recourse, you don't have FHA insurance guaranteeing lender will honor commitments.
Less Standardization
Terms vary significantly by lender, requiring more comparison shopping.
Fewer Lender Options
The proprietary market is smaller than HECM, with fewer lenders competing for your business.
Costs and Fees for Proprietary Reverse Mortgages
Cost structures vary by lender, but typical fees include:
- Origination fee: Typically 1-2% of home value, not capped by FHA formula
- Third-party closing costs: Appraisal, title insurance, recording—similar to HECM
- No upfront MIP: Saves the 2% FHA insurance premium HECM borrowers pay
- No ongoing MIP: Saves the 0.5% annual insurance HECM charges
- Higher interest rate: The "cost" of no MIP is typically offset by higher rates
Cost Comparison Example
$2 million home, age 72 borrower:
HECM (at FHA max)
- • Max proceeds: ~$750,000
- • Upfront MIP: ~$24,200 (2%)
- • Annual MIP: ~$3,750/yr (0.5%)
- • Interest rate: ~6.5%
Proprietary
- • Max proceeds: ~$1,000,000
- • Upfront MIP: $0
- • Annual MIP: $0
- • Interest rate: ~7.5-8%
Trade-off: Higher loan amount and no MIP, but higher interest rate.
Popular Proprietary Reverse Mortgage Programs
Several lenders specialize in proprietary reverse mortgages. While specific program availability changes, common options include:
- Longbridge Platinum: Homes up to $4 million, ages 55+
- Finance of America HomeSafe: Homes up to $4 million
- Reverse Mortgage Funding Equity Elite: High-value focus
- Mutual of Omaha: HomeSafe Second option
As a wholesale broker with access to 200+ lenders, I can help you compare proprietary options from multiple providers to find the best terms for your situation.
Frequently Asked Questions About Proprietary Reverse Mortgages
What is a proprietary reverse mortgage?
A proprietary reverse mortgage is a private, non-FHA reverse mortgage designed for high-value homes that exceed HECM lending limits. Also called "jumbo reverse mortgages," they're offered by private lenders and allow homeowners to access more equity from homes valued above the FHA limit of $1,209,750 (2026).
What is the difference between HECM and proprietary reverse mortgage?
HECM is FHA-insured with a maximum claim amount of $1,209,750 (2026), while proprietary reverse mortgages are private loans for homes valued up to $10 million or more. HECMs charge FHA mortgage insurance premiums but offer more consumer protections. Proprietary loans have no MIP but may have less regulatory oversight and typically higher interest rates.
What are the minimum home values for proprietary reverse mortgages?
Most proprietary reverse mortgage programs require minimum home values of $700,000 to $1,000,000, though some have lower thresholds. The sweet spot is homes valued between $1.5 million and $10 million, where borrowers can access significantly more equity than HECM limits allow.
Are proprietary reverse mortgages safe?
Proprietary reverse mortgages from reputable lenders are generally safe, offering non-recourse protection similar to HECM. However, they lack FHA insurance backing and have less regulatory oversight. Choose established lenders, compare multiple offers, and consider consulting a financial advisor before proceeding.
Do proprietary reverse mortgages require counseling?
HUD counseling is not federally required for proprietary reverse mortgages since they're not FHA products. However, many states require counseling for all reverse mortgage types, and reputable lenders often recommend or require counseling regardless. California requires counseling for all reverse mortgages including proprietary products.
What are the age requirements for proprietary reverse mortgages?
Most proprietary reverse mortgage programs require borrowers to be 60-62 years old, with some programs accepting borrowers as young as 55. This is potentially lower than the HECM requirement of 62. Older borrowers generally qualify for higher loan amounts regardless of product type.
How much can you get from a jumbo reverse mortgage?
Jumbo reverse mortgage loan amounts depend on age, home value, and interest rates, but can reach $4 million or more for the highest-value homes. A typical borrower with a $3 million home might access $1.2-1.8 million, compared to approximately $750,000 maximum through HECM.
Compare Your Reverse Mortgage Options
Have a High-Value Home?
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