The 3 types of reverse mortgages in 2026: HECM, proprietary (jumbo), and single-purpose
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Not every reverse mortgage is the same product. One is federally insured, one is a private-lender contract, and one is a limited-use program run by government agencies and nonprofits. Here's how they differ on eligibility, limits, costs and borrower protections.
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- Complimentary home value estimate
- Estimated principal limit for your age
- Existing mortgage payoff included
- Lump sum, line of credit, or monthly options
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Subject to HUD counseling, appraisal, credit and income review, and final lender approval. You remain responsible for property taxes, insurance, and home maintenance.
Estimate summary
- Home value estimate
- $412,000
- Youngest borrower age
- 72
- Estimated principal limit
- $219,400
- Existing mortgage payoff
- $68,000
- Estimated proceeds available
- $151,400
Simply Approved Mortgages • NMLS #2620881 • Equal Housing Opportunity
What is a reverse mortgage type?
A reverse mortgage converts part of a homeowner's equity into loan proceeds without a required monthly principal-and-interest payment, as long as the borrower keeps living in the home as a principal residence and keeps up property taxes, homeowners insurance, any HOA dues, and required maintenance. The loan and accrued interest become due when the last borrower permanently leaves the home.
Where the three types split is who backs the loan and what rules apply. A Home Equity Conversion Mortgage is insured by the Federal Housing Administration and follows a published federal rule set. A proprietary reverse mortgage is a private contract with a specific lender. A single-purpose reverse mortgage is a narrow program offered in limited areas.
Sources: HUD — HECM Program; CFPB — Reverse Mortgages
Side-by-side comparison
| Feature | HECM (FHA-insured) | Proprietary / jumbo | Single-purpose |
|---|---|---|---|
| Who backs it | FHA insurance | Private lender only | State/local agency or nonprofit |
| Minimum age | 62 (youngest borrower) | Set by each lender | Set by the program |
| Value considered | Capped at the FHA HECM lending limit | Designed for higher-value homes | Typically modest amounts |
| Use of proceeds | Borrower's choice | Borrower's choice | One approved purpose only |
| FHA mortgage insurance premium | Yes — upfront and annual | No FHA MIP | No FHA MIP |
| Independent counseling | Required by HUD | Commonly required by the lender or state | Varies by program |
| Payout options | Lump sum, term, tenure, line of credit, or a mix | Lender-specific; often lump sum or line of credit | Usually a single draw |
| Non-recourse | Yes, by federal rule | Often included — confirm in the loan documents | Confirm with the program |
Eligibility, terms, conditions and availability vary by borrower, property, lender, loan program and state. This table is general education, not a commitment to lend.
Which type usually fits which borrower
- HECM — home value at or below the FHA lending limit, FHA-eligible property, borrower wants the growing line-of-credit feature and federally defined protections.
- Proprietary / jumbo — home value well above the FHA limit, or a property type FHA will not insure, or a borrower who wants to avoid FHA mortgage insurance premiums and accepts lender-set terms instead.
- Single-purpose — a specific, narrow need such as property taxes or a critical repair, where a low-cost local program exists and the borrower does not need flexible access to funds.
Your numbers plus the 2026 Reverse Mortgage Guide.
Request your estimate and we include the 21-page plain-English guide: who qualifies at 62+, what a HECM costs, payout options, ongoing obligations, and the questions to ask before you sign.
- 21-page guide, no jargon
- HUD/FHA program rules explained
- Costs and fees broken down
- Questions to ask any loan officer
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Subject to HUD counseling, appraisal, credit and income review, and final lender approval. You remain responsible for property taxes, insurance, and home maintenance.
Estimate summary
- Home value estimate
- $412,000
- Youngest borrower age
- 72
- Estimated principal limit
- $219,400
- Existing mortgage payoff
- $68,000
- Estimated proceeds available
- $151,400
Simply Approved Mortgages • NMLS #2620881 • Equal Housing Opportunity
Expert insight from Simply Approved Mortgages
The comparison people skip is cost per dollar actually used. A proprietary loan can look cheaper up front because it has no FHA mortgage insurance premium, but a HECM line of credit has an unused-balance growth feature that a lump-sum proprietary loan does not. If you only need funds gradually, that growth feature often outweighs the premium.
Run both options side by side on the same draw schedule before deciding. We do that comparison in writing so the difference is a number, not a sales pitch.
Simply Approved Mortgages NMLS #2620881. Reverse mortgage loans funded by third-party HUD-approved HECM lenders.
Not sure which type fits your home?
A licensed loan officer can compare a HECM against a proprietary option on your actual numbers and tell you plainly which one costs less for how you'd use the funds.
- • Personalized HECM estimate based on your actual age and home value
- • Complimentary home value estimate when you provide your address
- • Side-by-side comparison of HECM vs. HELOC vs. cash-out refinance vs. downsizing
- • Help scheduling independent HUD-approved counseling
Types of reverse mortgages — FAQ
- What are the 3 types of reverse mortgages?
- Home Equity Conversion Mortgages (HECMs), which are insured by FHA; proprietary reverse mortgages (often called jumbo reverse mortgages), which are private loans not insured by FHA; and single-purpose reverse mortgages, which are offered by some state or local government agencies and nonprofits for one approved use such as property taxes or home repairs.
- Which type of reverse mortgage is most common?
- The HECM is by far the most common. It is the only reverse mortgage insured by the Federal Housing Administration and carries a federally defined rule set, including required independent counseling and non-recourse protection.
- What is the minimum age for each type?
- A HECM requires the youngest borrower to be at least 62. Proprietary reverse mortgages are set by each private lender and some accept younger borrowers; those are not FHA products and do not carry FHA insurance or FHA rules.
- When does a jumbo (proprietary) reverse mortgage make sense?
- Generally when the home value exceeds the FHA HECM lending limit, when the property type is not FHA-eligible, or when a borrower wants to avoid FHA mortgage insurance premiums. The trade-off is no FHA insurance backing and lender-specific terms.
- What is a single-purpose reverse mortgage?
- A low-cost loan offered in some areas by state or local agencies and nonprofits, where the proceeds may only be used for one lender-approved purpose such as property taxes or necessary home repairs. Availability is limited and varies by county.
- Are all reverse mortgages non-recourse?
- HECMs are non-recourse by federal rule — neither the borrower nor the heirs owe more than the home's value at payoff when the home is sold to satisfy the loan. Many proprietary programs include a similar feature, but because they are private contracts you must confirm it in that specific lender's loan documents.
- Do all three types require HUD counseling?
- HECMs always require independent HUD-approved counseling before a formal application. Many proprietary lenders require counseling as well, and some states require it. Single-purpose program requirements vary by the agency running the program.
- Can I switch between types later?
- In some cases, yes — a borrower with a HECM may later refinance into another HECM or a proprietary loan, or vice versa, if they qualify and the numbers work. Every refinance carries new closing costs, so it should be run as a break-even calculation.
See your reverse mortgage numbers on paper.
A licensed Simply Approved Mortgages loan officer reviews your estimate with you — line by line — so you can compare a HECM against a HELOC, a refinance, or staying put.
- Side-by-side payout comparison
- Upfront and ongoing cost estimate
- HUD counseling walked through
- Answers to your heirs questions
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Subject to HUD counseling, appraisal, credit and income review, and final lender approval. You remain responsible for property taxes, insurance, and home maintenance.
Estimate summary
- Home value estimate
- $412,000
- Youngest borrower age
- 72
- Estimated principal limit
- $219,400
- Existing mortgage payoff
- $68,000
- Estimated proceeds available
- $151,400
Simply Approved Mortgages • NMLS #2620881 • Equal Housing Opportunity
Keep learning about reverse mortgages
- HECM program guide
The FHA-insured reverse mortgage in detail.
- Jumbo / proprietary reverse mortgage
When a private program fits better.
- HECM for Purchase
Buying a home with a reverse mortgage.
- HECM line of credit
How the unused-balance growth feature works.
- Eligibility requirements
Age, property and financial assessment rules.
- Get my estimate
See a personalized estimate in minutes.
Where we're licensed — local guides
- Florida reverse mortgage guide
Statewide HECM rules, OFR oversight, homestead notes.
- Colorado reverse mortgage guide
Statewide HECM rules and DORA mortgage-broker oversight.
- Naples, FL
Collier County HECM and jumbo scenarios.
- Miami, FL
Miami-Dade condo FHA approval and HECM.
- The Villages, FL
Active-adult HECM scenarios.
- Denver, CO
Front Range HECM scenarios.
References & sources
Every statistic, program rule, and regulatory claim on this page is sourced from the primary U.S. government agencies and industry bodies listed below. We never source program facts from competing brokers, blogs, or unverified secondary sources.
Source links are maintained by Simply Approved Mortgages and verified periodically. Federal program rules can change — always confirm current-year specifics with HUD, the CFPB, or a HUD-approved counselor before acting on any information on this page.
Keep reading: the next steps most people take
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Related reverse mortgage articles, rate updates & HECM guides
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Documents required for a reverse mortgage
When you apply for a HECM reverse mortgage, your lender will request documents that verify your identity, property ownership, income, and assets. Gathering these in advance can speed up your estimate and application.
- Government-issued photo ID
Current driver’s license, passport, or state-issued ID.
- Social Security number verification
Social Security card or award letter showing your SSN.
- Current mortgage statement
Most recent statement if refinancing; purchase agreement if buying.
- Homeowner’s insurance declarations page
Shows current coverage, premium, and mortgagee clause.
- Property tax statement or receipt
Latest county tax bill showing taxes are current or payment history.
- Bank statements
Last 1-2 months to verify closing funds and residual reserves.
- Investment or retirement accounts
Recent statements for IRA, 401(k), brokerage, or other liquid assets.
- HOA or condo information
Homeowners association statement or condo questionnaire if applicable.
- Trust or title vesting documents
Required when the home is held in a living trust or entity.
- Flood insurance declaration
Current policy if the property is in a flood zone.
- HUD-approved counseling certificate
Required before loan application. Obtained from a HUD-approved reverse mortgage counselor.
Why we pull credit for your reverse mortgage pre-approval
HUD requires a Financial Assessment for every HECM reverse mortgage, including a review of your credit history and record of paying property taxes and homeowners insurance. As part of our standard broker/lender pre-approval process, we typically order a tri-merge credit report through a HUD-approved credit vendor to verify identity, review obligations, and confirm that you can continue paying property taxes, homeowners insurance, and maintenance after closing. Whether a tri-merge is required, and any fees, are set by the wholesale lender and credit vendor — not by HUD as a stand-alone rule.
Pay for your credit report — SmartPay
Simply Approved Mortgages uses MeridianLink SmartPay to securely collect the credit report fee for your reverse mortgage pre-approval. Payment goes directly to the credit vendor — not to us — and unlocks a tri-merge credit report (Equifax, Experian, TransUnion) that your loan officer uses to complete the broker/lender pre-approval file for HUD's Financial Assessment.
- Secure, PCI-compliant checkout hosted by MeridianLink
- Standard step in our broker/lender pre-approval process (not a HUD stand-alone requirement)
- Optional — you can decline; your loan officer will explain any impact on your options
You'll be redirected to cic.meridianlink.com (SmartPay).
Check your credit first — $1 trial at MyITINCredit
Before you apply, it's smart to know exactly where your credit stands. MyITINCredit offers a $1 trial for 15 days that includes all three credit reports and scores (Equifax, Experian, TransUnion), plus ongoing credit monitoring so you can catch errors, dispute inaccuracies, and watch for identity theft.
- See all 3 bureau reports & scores before your lender does
- Ongoing monitoring alerts you to new accounts or score changes
- Fix errors early — cleaner credit can widen your reverse mortgage options
You'll be redirected to myitincredit.com. Third-party service — terms apply.
Credit report fees are paid directly to the credit vendor. Simply Approved Mortgages (NMLS #2620881) does not profit from the credit pull. MyITINCredit is an independent third-party service; pricing, terms, and features are set by that provider.
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