Jumbo HECM vs Prop 19: Senior Home Equity Optimization Guide
California and Washington homeowners 62 and older have two powerful wealth tools: proprietary reverse mortgages that unlock equity above FHA limits, and Prop 19 tax base transfers that cut property taxes by thousands per year. This guide breaks down when to use each strategy — and how combining them maximizes retirement cash flow.
Key Takeaways
- Jumbo HECM reverse mortgages access home equity above the $1,209,750 FHA limit, with no monthly payments required.
- California Prop 19 allows homeowners 55+ to transfer their property tax base anywhere in the state, saving $5,000–$25,000/year on taxes.
- Washington senior property tax exemptions freeze assessed values for homeowners 61+ with household income under $75,000.
- Mo The Broker's Dual Benefit Strategy (combining Jumbo HECM with Prop 19 downsizing) creates tax-free equity access plus permanent property tax reduction — two compounding advantages in a single transaction.
- Standard HECM principal limits at age 70 equal approximately 52% of home value up to the FHA ceiling.
| Feature | Standard HECM (FHA) | Jumbo HECM (Proprietary) | HELOC |
|---|---|---|---|
| Max Home Value | $1,209,750 (FHA limit) | Up to $10,000,000 | No limit |
| Age Requirement | 62+ | 62+ | None |
| Monthly Payments | None required | None required | Interest-only (draw period) |
| FHA Insurance | Yes (MIP 0.5%/yr) | No | No |
| Credit Score | No minimum (FHA) | 680+ typical | 680+ |
| Rate Type | Fixed or adjustable | Fixed or adjustable | Variable |
| Non-Recourse | Yes | Yes (most programs) | No |
| Best For | Homes under FHA limit | High-value homes $1.2M+ | Short-term needs, income qualifies |
| Scenario | Current Tax Base | New Home Value | Without Prop 19 | With Prop 19 | Annual Savings |
|---|---|---|---|---|---|
| $3M → $1.5M | $250,000 | $1,500,000 | $16,500/yr | $2,750/yr | $13,750 |
| $2M → $1.2M | $300,000 | $1,200,000 | $13,200/yr | $3,300/yr | $9,900 |
| $1.5M → $900K | $200,000 | $900,000 | $9,900/yr | $2,200/yr | $7,700 |
| $1.2M → $800K | $180,000 | $800,000 | $8,800/yr | $1,980/yr | $6,820 |
| Home Value | Age 65 Available | Age 70 Available | Age 75 Available | Age 80 Available |
|---|---|---|---|---|
| $1,500,000 | $630,000 | $780,000 | $780,000 | $870,000 |
| $2,000,000 | $840,000 | $1,040,000 | $1,040,000 | $1,160,000 |
| $3,000,000 | $1,260,000 | $1,560,000 | $1,560,000 | $1,740,000 |
| $5,000,000 | $2,100,000 | $2,600,000 | $2,600,000 | $2,900,000 |
Jumbo HECM & Prop 19 Threshold Calculator
Educational estimate only. HECM principal limit factors, Prop 19 eligibility, and property taxes vary. Consult a licensed reverse mortgage specialist.
Get it sent to you
Share a few details and I will send your personalized summary and next steps.
Frequently Asked Questions: Jumbo HECM & Prop 19
What is the difference between a standard HECM and a Jumbo HECM?
A standard HECM is insured by FHA and caps the eligible home value at $1,209,750 for 2026. A Jumbo HECM (also called a proprietary reverse mortgage) is offered by private lenders with no FHA ceiling, covering homes valued up to $10 million. Jumbo HECMs skip the FHA mortgage insurance premium but typically require a 680+ credit score. Both eliminate monthly mortgage payments and are non-recourse loans, meaning the borrower never owes more than the home is worth.
How does Prop 19 save California seniors money on property taxes?
Prop 19 lets homeowners 55 and older transfer their current property tax assessed value (tax base) to a new primary residence anywhere in California. If you purchased your home decades ago, your assessed value is far below market value. Without Prop 19, buying a new home triggers a full reassessment at today's market price. With Prop 19, you keep the low tax base, saving $5,000 to $25,000 or more per year. This benefit applies up to three times for seniors.
Can I combine a Jumbo HECM with a Prop 19 tax transfer?
Yes. Seniors who sell a high-value home, use Prop 19 to transfer their tax base to a less expensive property, and then take a Jumbo HECM on the new home gain two benefits simultaneously: permanent property tax reduction and tax-free access to home equity with no monthly payments. This strategy works best for homeowners downsizing from properties valued above $1.5 million.
What senior property tax exemptions exist in Washington State?
Washington offers property tax exemptions and deferrals for homeowners 61 and older (or disabled) with household income under $75,000. Qualifying seniors receive a freeze on their assessed value and partial or full exemption from regular property tax levies. Higher-income seniors (up to $84,000) qualify for reduced exemptions. The state also offers a property tax deferral program that lets qualifying seniors delay payments until the home is sold.
Get Your Personalized HECM & Prop 19 Analysis
Every senior's equity situation is different. Call Mo Abdel directly for a confidential review of your home value, tax base, and reverse mortgage options across California and Washington.