Reverse Mortgage (HECM) Loans
A reverse mortgage, or HECM, is an FHA-insured loan that lets homeowners 62 and older use the equity in the home they live in. You keep paying property taxes, insurance and upkeep, and the loan can come due when no borrower lives in the home anymore.
How the money can come out
Each item below is an FHA rule for the HECM. FHA allows six payment plans in all.
- Fixed rate: one lump sum at closing. There are no later draws, except from a set-aside created at closing.
- Tenure, on an adjustable rate HECM: equal payments each month for as long as the loan is not paid off or called due.
- Term, on an adjustable rate HECM: equal payments each month for a number of months you choose.
- Line of credit, on an adjustable rate HECM: you draw money when you want and in the amounts you choose.
- Modified tenure or modified term, on an adjustable rate HECM: part of the money is set aside as a line of credit, and the rest comes as equal payments each month.
- On an adjustable rate HECM you can change payment plans later, as long as funds are available. A lump sum chosen at closing cannot be changed.
One lump sum at closing
Tenure payments each month
Payments for a set term
A line of credit
A mix of both
Change plans later
What Is A Reverse Mortgage?
A Home Equity Conversion Mortgage, or HECM, is the reverse mortgage FHA insures. It is a non-recourse loan that lets homeowners 62 and older use the equity in their principal residence.
FHA insures the HECM under the National Housing Act to give older homeowners the option of using the equity in their homes. Every borrower must be at least 62 by the closing date, and there is no maximum age. The home must be each borrower’s principal residence. There are three types: a HECM on the home you already live in, a HECM for Purchase to buy a one- to four-unit home you will live in, and a HECM-to-HECM refinance that pays off a current HECM.
The most you can receive is called the principal limit. It is based on the age of the youngest borrower or eligible non-borrowing spouse, the expected interest rate, and the maximum claim amount. The maximum claim amount is the lowest of the appraised value, the national HECM limit, and, on a purchase, the sales price. For 2026 the national limit is $1,249,125. On an adjustable rate HECM, the principal limit may increase each month, but there are limits on what can be paid out in the first 12 months. On a fixed rate HECM, the single lump sum at closing is subject to a similar limit, and there are no later draws.
At closing, HECM proceeds can pay off existing liens on the home that meet FHA’s seasoning rules, such as a lien in place for longer than 12 months, and can pay off a PACE obligation. Revolving and installment debts that are not attached to the home cannot be paid off at closing, and our program does not allow subordinate financing, so no second loan can stay on the home. Before your application is processed, you complete counseling with a HUD-approved HECM counselor. For who qualifies and what the lender reviews, see our reverse mortgage requirements page.
Why choose Saxton for a reverse mortgage
This page is for homeowners 62 and older, and the adult children helping them think it through.
Non-Recourse By Design
You or your estate will never owe more than the loan balance or the home’s value, whichever is less. No assets other than the home must be used to repay the debt.
No Fixed Maturity Date
A HECM has no fixed maturity date, but it can come due, for example when no surviving borrower lives in the home or a loan obligation is not met. You can pay back part or all of it at any time without penalty.
Taxes And Insurance Stay Yours
You keep paying property taxes, homeowners insurance, flood insurance where required, and any HOA, condo or PUD fees. You also keep the home in good repair.
A Set-Aside Can Help
A Life Expectancy Set-Aside holds back part of the proceeds to pay property taxes and insurance. You can ask for one even when it is not required.
No Minimum Draw Required
The lender cannot require, as a condition of the HECM, that any payment or draw exceed a minimum amount.
Room For A Younger Spouse
A non-borrowing spouse does not have to be 62. If the last borrower dies first, a spouse who meets all of HUD’s conditions may get a deferral period before the loan comes due.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about how a reverse mortgage works.
The reverse mortgage FHA insures is the Home Equity Conversion Mortgage, or HECM. It is a non-recourse loan that lets homeowners 62 and older access the equity in their principal residence. FHA insures it under the National Housing Act.
There are six payment plans. A fixed rate HECM pays one lump sum at closing. An adjustable rate HECM can pay equal amounts each month for as long as the loan is not paid off or called due, equal amounts each month for a number of months you choose, a line of credit you draw on when you want, or a mix of a line of credit and payments each month.
It depends on the age of the youngest borrower or eligible non-borrowing spouse, the expected interest rate, and the maximum claim amount. The maximum claim amount is the lowest of the appraised value, the national limit and, on a purchase, the sales price. For 2026 the national limit is $1,249,125. When an eligible non-borrowing spouse is younger than the borrower, the amount is based on the spouse’s age.
Your property charges: property taxes, homeowners insurance, flood insurance if the home is in a special flood hazard area, and any HOA, condo, PUD or ground rent fees and special assessments. You also keep the home in good repair and confirm each year that it is still your principal residence. If set-aside funds run short, you pay the charges yourself.
There is no fixed maturity date. The loan can be called due when no surviving borrower lives in the home as a principal residence, when a borrower is away for more than 12 consecutive months because of illness and no other borrower lives there, or when a loan obligation is not met, such as leaving property charges unpaid. It also becomes due if a borrower transfers all of their title and no other borrower keeps title.
Yes. You can sell the home at any time. Once the loan is due, the home may be sold for the lesser of the full debt, including expenses tied to the loan, or 95 percent of the current appraised value.
Yes, if the lien qualifies. At closing, HECM proceeds can pay off existing liens on the home that meet FHA’s seasoning rules, such as a lien in place for longer than 12 months. Revolving or installment debts not attached to the home cannot be paid at closing, and our program does not allow a second loan to stay on the home.
Find out what you qualify for
Tell us about your home and what you want the money to do, and we will walk you through how a HECM could fit.
Get Pre-Qualified- U.S. Department of Housing and Urban Development, FHA and housing resources
- U.S. Department of Housing and Urban Development, FHA mortgage insurance premiums
Loan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.