Complete Guide to Reverse Mortgages in California & Washington [2026]

What Is a Reverse Mortgage (HECM)?

A Home Equity Conversion Mortgage (HECM) is an FHA-insured loan that allows homeowners 62 and older to access their home equity without selling their home or making monthly mortgage payments. Created by Congress in 1988 and insured by the Federal Housing Administration, the HECM program provides seniors a way to convert accumulated home equity into usable funds for retirement.

Mo Abdel, a licensed mortgage broker serving California and Washington through Lumin Lending (NMLS #2716106), explains: "A reverse mortgage fundamentally changes the cash flow relationship with your home. Instead of you paying the mortgage, the mortgage essentially pays you—while you continue to own and live in your home."

Key Features of HECM Loans

• No Monthly Mortgage Payments Required: You can choose to make payments, but they are not required as long as you meet loan obligations
• FHA-Insured: Government backing provides consumer protections and guarantees
• Non-Recourse: You or your heirs will never owe more than the home's value at time of repayment
• Flexible Access: Receive funds as lump sum, line of credit, monthly payments, or any combination
• Stay in Your Home: Retain full ownership and can live in your home as long as you meet loan obligations
• Growing Line of Credit: Unused funds in a line of credit grow over time

How HECM Differs from Traditional Mortgages

The Three Types of Reverse Mortgages

1. HECM (Home Equity Conversion Mortgage)

   The most common type, insured by FHA with federal consumer protections. Subject to the 2026 lending limit of $1,149,825. Must be originated by an FHA-approved lender and requires HUD counseling.

2. Proprietary (Jumbo) Reverse Mortgages

   Private loans not insured by FHA, designed for homes valued above the HECM limit. Allow access to more equity for high-value California and Washington properties. Some programs accept borrowers as young as 60.

3. Single-Purpose Reverse Mortgages

   Offered by some state and local government agencies and nonprofits for specific purposes like home repairs or property taxes. Limited availability and specific use requirements.

How Reverse Mortgages Work: The Mechanics

Understanding the mechanics of reverse mortgages helps California and Washington seniors make informed decisions about whether this financial tool fits their retirement plan.

The Basic Concept

In a traditional mortgage, you borrow money and pay it back over time with monthly payments. A reverse mortgage inverts this: you receive money from your home equity, and the loan balance grows over time. Repayment is deferred until a triggering event occurs.

How the Money Flows

1. Equity Converted to Cash

   Based on your age, home value, and current rates, a portion of your equity becomes available. This is called your Principal Limit—the maximum amount you can access through the reverse mortgage.

2. Choose Your Payout Method

   Select how to receive funds: lump sum, line of credit, monthly payments, or a combination. Each option has different characteristics and benefits.

3. Interest Accrues on Balance

   Interest charges are added to your loan balance rather than paid monthly. The balance grows through negative amortization, which is why reverse mortgage balances increase over time.

4. You Continue Living in Your Home

   As long as you maintain the property, pay taxes and insurance, and use the home as your primary residence, you can stay indefinitely.

5. Repayment When You Leave

   The loan becomes due when you sell, move permanently, or pass away. At that point, the home is typically sold and the loan repaid from proceeds.

Your Ongoing Obligations

While no monthly mortgage payments are required, reverse mortgage borrowers must maintain certain obligations:

• Property Taxes: Continue paying annual property taxes on time
• Homeowner's Insurance: Maintain adequate insurance coverage
• Home Maintenance: Keep the property in reasonable condition
• HOA Fees: Pay any homeowner association dues (if applicable)
• Primary Residence: Continue living in the home as your principal residence

Failure to meet these obligations can trigger loan default and potential foreclosure. If the financial assessment reveals concerns about your ability to meet these obligations, a Life Expectancy Set-Aside (LESA) may be required.

Repayment Triggers

The reverse mortgage becomes due and payable when:

• The last borrower (or eligible non-borrowing spouse) passes away
• The home is sold or title is transferred
• The borrower moves out for more than 12 consecutive months
• The borrower fails to meet loan obligations (taxes, insurance, maintenance)
• The borrower files bankruptcy (in some cases)

Who Qualifies for a Reverse Mortgage in California & Washington

HECM reverse mortgages have specific eligibility requirements that California and Washington homeowners must meet. Understanding these requirements helps determine if a reverse mortgage is a viable option for your situation.

Age Requirements

• The youngest borrower must be at least 62 years old
• If both spouses are on the loan, the younger spouse's age determines the Principal Limit
• Older borrowers qualify for higher Principal Limits (more available funds)
• Spouses under 62 can be listed as Eligible Non-Borrowing Spouse for protection

Property Requirements

• Primary Residence: Must be your principal home where you live most of the year
• Single-Family Homes: Standard detached homes qualify
• 2-4 Unit Properties: Owner must occupy one unit
• HUD-Approved Condos: Condo project must be on FHA-approved list
• Manufactured Homes: Must meet FHA requirements (permanent foundation, built after June 1976)
• Property Condition: Must meet FHA minimum property standards (repairs may be required)

Equity Requirements

You must have sufficient equity in your home to support the reverse mortgage. While there's no fixed equity percentage requirement, generally:

• Higher equity = higher Principal Limit = more funds available
• If you have an existing mortgage, it must be paid off at closing using reverse mortgage proceeds
• The remaining funds after payoff are available to you

Financial Assessment

Since 2015, HUD requires lenders to conduct a financial assessment evaluating your ability to meet ongoing obligations:

• Credit History: Review of payment history on existing obligations
• Income Analysis: Evaluation of income sources (Social Security, pension, investments)
• Property Charge History: Past payment of property taxes and insurance
• Cash Flow Analysis: Ability to cover ongoing property charges

If the financial assessment reveals concerns, a Life Expectancy Set-Aside (LESA) may be required. A LESA sets aside a portion of loan proceeds to pay property taxes and insurance, ensuring these obligations are met.

California-Specific Considerations

• DRE Licensing: Lenders must be licensed by California Department of Real Estate
• State Disclosures: California requires specific disclosure documents
• 7-Day Cooling Off: California law requires 7-day waiting period after counseling
• High Home Values: Many California homes exceed HECM limit, making proprietary programs relevant

Washington-Specific Considerations

• DFI Licensing: Washington Department of Financial Institutions oversight
• State Disclosures: Washington-specific disclosure requirements
• Consumer Protection: Additional state-level consumer protections apply
• Seattle Metro: High home values in Seattle area often require proprietary programs

HUD Counseling Requirement: A Mandatory Step

Before applying for any HECM reverse mortgage, federal law requires completion of counseling with a HUD-approved counseling agency. This requirement protects seniors by ensuring they understand how reverse mortgages work before committing.

What the Counseling Covers

• How Reverse Mortgages Work: Detailed explanation of HECM mechanics
• Financial Implications: Impact on equity, estate, and finances
• Borrower Obligations: Taxes, insurance, maintenance requirements
• Payout Options: Explanation of different ways to receive funds
• Costs and Fees: Understanding of all associated costs
• Alternatives: Other options for accessing home equity or income
• Impact on Benefits: How reverse mortgages affect Medicaid, SSI, etc.

Counseling Logistics

• Cost: Typically around $125 (can be financed into the loan)
• Format: Phone counseling or in-person sessions available
• Duration: Usually 60-90 minutes
• Certificate: You receive a counseling certificate required for loan application
• Validity: Certificate typically valid for 180 days

Finding a HUD-Approved Counselor

HUD maintains a list of approved counseling agencies. Mo Abdel at Lumin Lending provides referrals to HUD-approved counselors as part of the reverse mortgage consultation process. You can also search the HUD website directly for approved agencies in California or Washington.

How Much Can You Get from a Reverse Mortgage?

The amount available through a reverse mortgage depends on several factors combined into what's called the Principal Limit. Understanding these factors helps California and Washington seniors estimate their potential proceeds.

Factors Affecting Your Principal Limit

1. Age of Youngest Borrower

   Older borrowers qualify for a higher percentage of their home's value. A 75-year-old will have a higher Principal Limit Factor (PLF) than a 62-year-old with the same home value.

2. Home Value (Up to FHA Limit)

   Your home's appraised value determines the base, but the 2026 FHA limit caps the calculation at $1,149,825. Homes worth more than this limit are calculated as if worth $1,149,825 for HECM purposes.

3. Current Interest Rates

   Lower interest rates result in higher Principal Limits. Rate environment significantly impacts available funds.

4. Existing Mortgage Balance

   Any existing mortgage must be paid off from proceeds, reducing available funds.

2026 HECM Lending Limits

First-Year Disbursement Rules

For HECM loans, there are limits on how much you can access in the first year:

• General Rule: Maximum 60% of Principal Limit available in first 12 months
• Exception - Mandatory Obligations: If you need to pay off an existing mortgage or other mandatory obligations exceeding 60%, you can access up to that amount plus an additional 10%
• After Year One: Remaining Principal Limit becomes fully available

Calculating Net Available Funds

Mo Abdel at Lumin Lending provides personalized reverse mortgage calculations for California and Washington seniors based on actual age, home value, and current rates.

Reverse Mortgage Payout Options Explained

HECM reverse mortgages offer flexible ways to receive your funds. Understanding each option helps you choose the approach that best fits your retirement needs.

Option 1: Lump Sum (Fixed Rate)

• Receive entire available amount at closing
• Fixed interest rate locks in for the life of the loan
• Subject to first-year disbursement limits (60% rule)
• No growth feature (what you get at closing is the maximum)
• Best for paying off large existing mortgage or immediate large expense

Option 2: Line of Credit (Adjustable Rate)

• Access funds as needed over time
• Unused portion grows at the same rate charged on the loan (major advantage)
• Adjustable interest rate tied to an index plus margin
• Most popular option among reverse mortgage borrowers
• Best for flexibility and building a financial safety net

Option 3: Tenure Payments

• Equal monthly payments for as long as you live in the home
• Payments continue even if you outlive the actuarial projections
• Provides predictable monthly income
• Best for supplementing retirement income consistently

Option 4: Term Payments

• Equal monthly payments for a specific number of years you choose
• Higher monthly amounts than tenure (same funds over shorter period)
• Useful for bridging to Social Security optimization or pension start
• Best for specific income needs during defined period

Option 5: Combination/Modified Plans

You can combine options to meet multiple needs:

• Line of Credit + Monthly Payments: Regular income plus emergency access
• Partial Lump Sum + Line of Credit: Immediate need plus future flexibility
• Term Payments + Line of Credit: Bridge income plus long-term safety net

The Line of Credit Growth Feature

The HECM line of credit includes a unique benefit: unused funds grow over time at the same rate charged on the loan. This growth feature can significantly increase your available funds over time.

*Illustrative examples assuming 6% growth rate. Actual growth depends on current rates. This is not a guarantee of future performance.

Which Payout Option Is Best?

Mo Abdel at Lumin Lending typically recommends the line of credit option for most California and Washington seniors because:

• The growth feature creates an increasing financial safety net
• Flexibility allows access when needed without commitment
• You only pay interest on funds actually drawn
• Can be changed to monthly payments later if needed

Reverse Mortgage Costs and Fees

Understanding the costs associated with reverse mortgages helps California and Washington seniors evaluate whether the financial benefits outweigh the expenses.

Upfront Costs

Ongoing Costs

• Annual MIP: 0.5% of outstanding loan balance per year
• Interest: Accrues on loan balance (fixed or adjustable rate)
• Servicing Fee: Up to $35/month (often waived by lenders)

Financing Costs Into the Loan

Most reverse mortgage costs can be financed into the loan, meaning no out-of-pocket expenses at closing. However, financing costs reduces your net available proceeds. Mo Abdel at Lumin Lending reviews all cost scenarios to help you understand the financial impact.

Pros and Cons of Reverse Mortgages

A balanced understanding of reverse mortgage advantages and disadvantages helps California and Washington seniors make informed decisions.

Advantages of Reverse Mortgages

• No Monthly Mortgage Payments: Eliminates a major monthly expense, freeing cash flow for living expenses, healthcare, or enjoyment
• Stay in Your Home: Access equity without selling or moving—age in place comfortably
• Non-Recourse Protection: You or your heirs will never owe more than the home's value at repayment
• Flexible Payout Options: Choose how and when you receive funds based on your needs
• Line of Credit Growth: Unused funds grow over time, creating an increasing safety net
• Tax-Free Proceeds: Loan advances are not considered taxable income
• Social Security/Medicare Unaffected: Does not impact these non-need-based benefits
• Voluntary Payments: Can make payments to reduce balance if desired

Disadvantages of Reverse Mortgages

• Loan Balance Grows: Interest accrues over time, reducing remaining equity
• Reduced Inheritance: Less home equity remains for heirs
• Upfront Costs: Higher initial costs than traditional refinancing
• Must Maintain Property: Ongoing obligations for taxes, insurance, and upkeep
• May Affect Medicaid/SSI: Could impact eligibility for need-based benefits if funds not managed properly
• Complexity: More complicated than traditional loans, requiring thorough understanding
• Moving Triggers Repayment: Must repay if you leave the home permanently

When a Reverse Mortgage Makes Sense

• You plan to stay in your home for the long term
• You need to supplement retirement income
• You want to eliminate existing mortgage payments
• You have significant home equity but limited liquid assets
• You don't prioritize leaving your home to heirs
• You want a financial safety net that grows over time
• You need funds for healthcare, home modifications, or other retirement expenses

When to Consider Alternatives

• You may move or sell within a few years
• You want to preserve maximum equity for heirs
• You can comfortably afford payments on a HELOC or home equity loan
• You're not yet 62 years old
• You have other liquid assets that could meet your needs
• You're uncomfortable with the complexity of reverse mortgages

HECM for Purchase: Buying a New Home with a Reverse Mortgage

The HECM for Purchase program allows seniors 62+ to buy a new home using a reverse mortgage, combining the purchase and reverse mortgage into a single transaction. This option is ideal for California and Washington seniors looking to downsize, relocate, or purchase a more suitable home for retirement.

How HECM for Purchase Works

1. Make a down payment (typically 45-62% of purchase price, depending on age and rates)
2. Finance the remainder with a HECM reverse mortgage
3. Move into your new home with no monthly mortgage payments from day one
4. Retain ownership and build your retirement in your chosen location

Benefits of HECM for Purchase

• Preserve More Savings: Use home equity instead of depleting retirement accounts for housing
• Right-Size Your Home: Move to a home that better fits your current needs
• No Monthly Payments: Enter retirement housing with no mortgage payment obligation
• Single Transaction: Avoid the complexity of selling, buying, and then getting a reverse mortgage separately
• Relocate Near Family: Move closer to children or grandchildren while preserving assets

Down Payment Requirements

The required down payment for HECM for Purchase depends on the borrower's age and current interest rates:

*Approximate ranges based on current market conditions. Actual requirements depend on specific rates and property value. Contact Mo Abdel at Lumin Lending for precise calculations.

Proprietary (Jumbo) Reverse Mortgages

For California and Washington seniors with homes valued above the HECM limit of $1,149,825, proprietary reverse mortgages provide an alternative way to access more equity.

Key Features of Proprietary Reverse Mortgages

• No FHA Lending Limit: Access equity on high-value homes beyond $1,149,825
• Age Flexibility: Some programs accept borrowers as young as 60
• Not FHA-Insured: Private lender programs with different terms
• Different Fee Structures: May have lower upfront costs than HECM
• Non-Recourse: Most proprietary programs are also non-recourse

When to Consider Proprietary

• Home value significantly exceeds $1,149,825
• You're between 60-61 years old (below HECM age requirement)
• You want to access more equity than HECM permits
• You have a high-value California coastal or Washington Seattle-area property

Proprietary vs HECM Comparison

Impact on Heirs and Inheritance

Understanding how reverse mortgages affect inheritance helps families plan appropriately and reduces surprises.

The Non-Recourse Protection

HECM loans are non-recourse, meaning neither you nor your heirs will ever owe more than the home's value at the time of repayment. If the loan balance exceeds home value due to market depreciation or long loan duration, FHA insurance covers the difference. This protection is significant for heirs.

Options for Heirs When the Borrower Passes

1. Sell the Home

   Most common option. Proceeds pay off the reverse mortgage; any remaining equity goes to heirs. If the home sells for more than owed, heirs keep the difference.

2. Refinance to Keep the Home

   Heirs can get a traditional mortgage to pay off the reverse mortgage and keep the property. Must qualify for the new loan based on their own credit and income.

3. Pay Off the Loan Balance

   Heirs can pay the lesser of the loan balance or 95% of appraised value using other funds to keep the home.

4. Deed in Lieu of Foreclosure

   Transfer property to the lender with no further obligation. Used when loan balance exceeds home value and heirs don't want to keep the property.

Timeline for Heirs

• Initial Period: 30 days to establish contact with servicer after borrower passes
• Decision Period: 6 months to decide and arrange payoff
• Extensions: Up to two 3-month extensions available (12 months total)
• Communication is Key: Staying in contact with servicer prevents foreclosure proceedings

Planning Conversations with Family

Mo Abdel at Lumin Lending encourages reverse mortgage borrowers to discuss their plans with family members. Open communication about:

• Why you're getting a reverse mortgage
• What obligations exist (taxes, insurance, maintenance)
• What heirs can expect regarding remaining equity
• Contact information for the loan servicer

Reverse Mortgage vs Alternatives

Before committing to a reverse mortgage, California and Washington seniors should understand the alternatives for accessing home equity or supplementing retirement income.

Reverse Mortgage vs HELOC

Reverse Mortgage vs Selling Your Home

• Selling: Full access to equity but requires moving and finding new housing
• Reverse Mortgage: Partial equity access but stay in your home
• Consider: Emotional attachment, moving costs, alternative housing expenses

Reverse Mortgage vs Downsizing

• Downsizing: Sell current home, buy smaller/less expensive home, keep the difference
• HECM for Purchase: Buy new home with reverse mortgage, preserving more retirement savings
• Consider: Transaction costs, moving stress, community ties

Reverse Mortgage vs Cash-Out Refinance

• Cash-Out Refinance: Lower costs but requires monthly payments and income qualification
• Reverse Mortgage: Higher costs but no monthly payments
• Consider: Your ability to make monthly payments and desire for payment-free living

Common Reverse Mortgage Myths Debunked

Misinformation about reverse mortgages prevents many California and Washington seniors from considering a potentially beneficial financial tool. Let's address common myths with facts.

Myth: "The Bank Takes Your Home"

Fact: You retain full ownership and title to your home. The lender has a lien (just like any mortgage), but you own the property. You can sell, refinance, or leave it to heirs at any time.

Myth: "You Can Owe More Than Your Home Is Worth"

Fact: HECM loans are non-recourse. You (or your heirs) will never owe more than the home's value at the time of repayment. FHA insurance covers any shortfall.

Myth: "Reverse Mortgages Are Only for Desperate People"

Fact: Reverse mortgages are legitimate financial planning tools used by financially sophisticated seniors. Financial planners increasingly recommend them as part of comprehensive retirement strategies for home-rich, cash-poor seniors and even for those with other assets seeking to optimize retirement income.

Myth: "Children Will Be Stuck with Debt"

Fact: The non-recourse feature means heirs are never personally liable. They can walk away from a property where the loan exceeds value with no obligation. If the home has equity, they keep it after paying off the loan.

Myth: "You Can't Get a Reverse Mortgage with an Existing Mortgage"

Fact: Many reverse mortgages are used specifically to pay off existing mortgages. The existing balance is paid from proceeds at closing, eliminating the monthly payment.

Myth: "Reverse Mortgage Proceeds Are Taxable"

Fact: Reverse mortgage proceeds are loan advances, not income. They are not taxable. However, consult a tax professional for your specific situation.

People Also Ask About Reverse Mortgages

What are the 3 types of reverse mortgages?

The three types are: (1) HECM (Home Equity Conversion Mortgage) - the most common, FHA-insured option with a 2026 limit of $1,149,825; (2) Proprietary (jumbo) reverse mortgages - private loans for homes exceeding the HECM limit; and (3) Single-purpose reverse mortgages - offered by some government agencies for specific uses like home repairs.

How does a reverse mortgage affect Social Security?

Reverse mortgage proceeds do not affect Social Security retirement benefits because Social Security is not need-based. However, reverse mortgage proceeds could affect need-based benefits like Medicaid and SSI if funds accumulate in your bank account. Proper planning can minimize this impact—consult a benefits specialist.

Can you get a reverse mortgage on a condo in California?

Yes, but the condo project must be on FHA's approved list. If not already approved, single-unit approval may be possible. Mo Abdel at Lumin Lending can help determine if your California condo qualifies and navigate the approval process if needed.

What is the 60% rule for reverse mortgages?

The 60% rule limits first-year disbursements to 60% of the Principal Limit. This protects borrowers from depleting too much equity early. Exception: if mandatory obligations (like paying off an existing mortgage) exceed 60%, you can access up to that amount plus 10%.

How do you pay back a reverse mortgage?

Reverse mortgages are repaid when you sell, move permanently, or pass away. At that point, the loan is typically paid by selling the home. Heirs can also refinance to keep the property or pay from other funds. You can make voluntary payments anytime without penalty.

What disqualifies you from a reverse mortgage?

Potential disqualifiers include: being under 62, property not being your primary residence, ineligible property type (vacation homes, most co-ops), insufficient equity, failure of financial assessment without acceptable LESA arrangement, or refusal to complete HUD counseling.

Is there a maximum income for reverse mortgage?

No, there is no maximum income limit. Reverse mortgages are available regardless of income level. The financial assessment reviews your ability to pay property charges, but high income is never a disqualifier.

Can a family member buy a house with a reverse mortgage on it?

Yes, when the loan becomes due, family members can purchase the property by paying off the reverse mortgage balance or 95% of appraised value (whichever is less). This can be done with their own mortgage financing or cash.

Frequently Asked Questions

What is the age requirement for a reverse mortgage in California?

The youngest borrower must be at least 62 years old to qualify for a HECM reverse mortgage in California. Spouses younger than 62 can be listed as Eligible Non-Borrowing Spouses, which provides protections allowing them to remain in the home after the borrowing spouse passes away. Higher borrower age results in higher available loan amounts.

Can I lose my home with a reverse mortgage?

You cannot lose your home simply for having a reverse mortgage. However, you must continue to pay property taxes, homeowner's insurance, and maintain the property. Failure to meet these obligations could result in foreclosure. As long as you meet these requirements and live in the home as your primary residence, you can stay indefinitely.

Do I still own my home with a reverse mortgage?

Yes, you retain full ownership and title to your home with a reverse mortgage. The lender has a lien on the property (just like a traditional mortgage), but the title remains in your name. You can sell the home, refinance, or leave it to heirs at any time.

How much can I get from a California reverse mortgage?

The amount depends on your age (older = more), home value (up to the 2026 FHA limit of $1,149,825), current interest rates, and any existing mortgage balance. Typically, borrowers can access 40-75% of their home's value through a HECM. Mo Abdel at Lumin Lending (NMLS #1426884) provides personalized calculations.

Is HUD counseling required for reverse mortgages?

Yes, HUD-approved counseling is mandatory before applying for a HECM reverse mortgage. This federal requirement protects consumers by ensuring they understand how the loan works, their obligations, and alternatives. The counseling typically costs around $125 and can be done by phone or in person.

Are reverse mortgage proceeds taxable?

No, reverse mortgage proceeds are not considered taxable income because they are loan advances, not income. This is a significant advantage for seniors on fixed incomes. However, consult a tax professional about your specific situation.

What happens to my reverse mortgage when I die?

When the last borrower passes away, the reverse mortgage becomes due. Heirs have options: sell the home and keep any equity above the loan balance, refinance into a traditional mortgage to keep the home, pay off the loan balance, or execute a deed in lieu. The HECM is non-recourse, so heirs never owe more than the home's value.

Can I get a reverse mortgage with an existing mortgage?

Yes, you can get a reverse mortgage even with an existing mortgage balance. The existing mortgage must be paid off with the reverse mortgage proceeds at closing. Many seniors use this strategy specifically to eliminate their monthly mortgage payment and improve cash flow.

What is a proprietary reverse mortgage?

A proprietary (or jumbo) reverse mortgage is a private loan not insured by FHA, designed for homes valued above the HECM limit of $1,149,825. These programs allow California and Washington seniors with high-value homes to access more equity. Some programs accept borrowers as young as 60.

How long does the reverse mortgage process take?

The process typically takes 30-45 days from application to closing, including HUD counseling, appraisal, and underwriting. Some factors can extend or shorten this timeline.

Can both spouses be on a reverse mortgage?

Yes, both spouses can be co-borrowers if both are 62 or older. If one spouse is younger than 62, they can be listed as an Eligible Non-Borrowing Spouse (NBS), providing protections allowing them to remain in the home after the borrowing spouse passes away.

What credit score do I need for a reverse mortgage?

There is no minimum credit score requirement for HECM reverse mortgages. However, lenders conduct a financial assessment reviewing credit history to determine ability to pay property taxes and insurance.

What is a HECM for Purchase?

HECM for Purchase allows seniors 62+ to buy a new home using a reverse mortgage. You make a larger down payment (typically 45-62%) and finance the remainder with a reverse mortgage, moving into your new home with no monthly mortgage payments.

Can I pay off a reverse mortgage early?

Yes, you can pay off a reverse mortgage at any time without penalty. HECM loans have no prepayment penalties. You can make voluntary payments to reduce the balance whenever you choose.

What happens if home values drop after getting a reverse mortgage?

HECM reverse mortgages are non-recourse loans, meaning you (or your heirs) never owe more than the home's value at repayment. If the loan balance exceeds home value, FHA insurance covers the difference.

Get Your Personalized Reverse Mortgage Assessment

If you're 62 or older and considering a reverse mortgage in California or Washington, a personalized consultation can help you understand your options. Mo Abdel at Lumin Lending (NMLS #1426884) provides expert guidance on HECM loans, proprietary reverse mortgages, and alternatives. Contact us to receive HUD-approved counselor referrals and personalized calculations based on your age, home value, and goals.