Reverse Mortgage Requirements
Age 62 and equity are the start. The financial assessment and ongoing obligations are what borrowers underestimate.
By Mike Basti, Licensed Mortgage Broker (NMLS #377740) · Updated September 2026
The Eligibility Checklist
| Requirement | Standard | Notes |
|---|---|---|
| Age | 62 or older | Based on the youngest borrower on title |
| Occupancy | Primary residence | Must live there the majority of the year |
| Equity | Substantial, typically 50%+ | Existing mortgage paid off at closing |
| Counselling | HUD-approved session required | Certificate needed before application proceeds |
| Financial assessment | Income and credit reviewed | Confirms ability to pay taxes and insurance |
| Property type | SFR, 2–4 unit, FHA-approved condo | Owner must occupy one unit |
| Property condition | Meets FHA standards | Repairs may be required at closing |
The 2026 Lending Limit
The FHA HECM maximum claim amount for 2026 is $1,249,125, up from $1,209,750 in 2025. It applies nationwide with no county variation.
Home value above that figure is not counted in the calculation. On a $2,000,000 California home, the maths runs on $1,249,125. Borrowers above the limit sometimes use a proprietary jumbo reverse mortgage instead, which is not FHA-insured and follows lender rules. Estimate your figure with the reverse mortgage calculator.
The Financial Assessment
Since 2015, HECM borrowers undergo a financial assessment. It is not a traditional income qualification — there is no debt-to-income test — but the lender does review income, assets and credit history to confirm you can meet the ongoing obligations.
Where the assessment raises concern, the lender may require a Life Expectancy Set-Aside, which reserves part of the proceeds to pay property taxes and insurance for the expected life of the loan. That reduces the cash available to you but protects against default.
The obligations that continue
A reverse mortgage removes the monthly mortgage payment, not your other housing costs. You remain responsible for property taxes, homeowners insurance, HOA dues and maintenance. Falling behind on any of these can trigger default and foreclosure — it is the leading cause of reverse mortgage failure, and it surprises people who expected the loan to remove all housing obligations.
Counselling Is Mandatory
Every HECM borrower must complete a session with a HUD-approved counsellor before the application proceeds. It covers how the loan works, the costs, the obligations, and the alternatives.
Sessions run roughly 60 to 90 minutes by phone or in person, and typically cost $125 to $200, though it can be waived for hardship. The certificate is valid for 180 days. Treat it as a genuine opportunity to ask questions rather than a formality.
What Happens to Heirs
The loan becomes due when the last borrower permanently leaves the home, sells, or passes away. Heirs then have options: repay the balance and keep the property, sell and keep any remaining equity, or hand the property back.
HECM loans are non-recourse, which matters. If the balance exceeds the home value at repayment, neither you nor your heirs owe the difference — FHA insurance covers it. Heirs can also buy the home for 95% of appraised value if the balance is higher.
Related Pages
Frequently Asked Questions
What are the requirements for a reverse mortgage in California?
You must be 62 or older based on the youngest borrower, occupy the home as your primary residence, hold substantial equity, complete HUD-approved counselling, and pass a financial assessment confirming you can cover taxes and insurance. The property must be a single-family home, two-to-four unit you occupy, or FHA-approved condo.
What is the 2026 reverse mortgage limit?
The FHA HECM maximum claim amount is $1,249,125 for 2026, up from $1,209,750 in 2025, applied nationwide with no county variation. Home value above that is not counted — on a $2,000,000 California home the calculation still runs on $1,249,125.
Is there an income requirement for a reverse mortgage?
There is no debt-to-income test, but since 2015 borrowers undergo a financial assessment reviewing income, assets and credit to confirm they can meet ongoing obligations. Where concerns arise, the lender may require a Life Expectancy Set-Aside reserving funds for taxes and insurance, which reduces available cash.
Do I still pay property taxes with a reverse mortgage?
Yes. The loan removes the monthly mortgage payment, not your other housing costs. You remain responsible for property taxes, homeowners insurance, HOA dues and maintenance, and falling behind can trigger default and foreclosure. It is the leading cause of reverse mortgage failure.
Is counselling required for a reverse mortgage?
Yes, with a HUD-approved counsellor before the application proceeds. Sessions run 60 to 90 minutes by phone or in person and typically cost $125 to $200, waivable for hardship. The certificate is valid for 180 days.
What happens to my heirs?
The loan becomes due when the last borrower permanently leaves, sells or passes away. Heirs can repay and keep the property, sell and retain any remaining equity, or hand it back. HECM loans are non-recourse, so if the balance exceeds the home value neither you nor your heirs owe the difference.
Educational information only, not a commitment to lend. Program terms vary by lender and are subject to credit approval. Figures reflect 2026 program limits. Sources: FHFA, HUD, VA, CFPB, California DRE. Sponsored by Save Financial, Inc. (NMLS #377740). California DRE #01875766. Equal Housing Lender.
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