Complete, self-contained answers to the questions seniors, families, and financial advisors actually ask, covering reverse mortgages, second-lien products, costs, risks, and more.
What they are, how they work, who owns the home, and what happens at the end of the loan.
A reverse mortgage is a home loan for homeowners age 62 and older that allows you to convert a portion of your home equity into cash, without making monthly principal-and-interest payments. Instead of you paying the lender each month, the loan balance grows over time as interest accrues. The loan becomes due and payable when you sell the home, permanently move out, or pass away. You remain on title and continue to own your home throughout the life of the loan.
At closing, you receive your funds, as a lump sum, monthly payment, line of credit, or a combination, based on your age, your home's appraised value, and current interest rates. You are not required to make monthly mortgage payments, though you may make voluntary payments if you choose. The loan balance grows over time as interest accrues. When a triggering event occurs (you sell, permanently move out, or pass away), the loan is repaid, typically from the sale proceeds of the home. Any remaining equity after repayment belongs to you or your heirs.
No. You remain on title as the owner of your home throughout the life of the reverse mortgage. You cannot be forced out of your home as long as you continue to live there as your primary residence, keep current on property taxes, maintain homeowners insurance, and keep the home in reasonable condition. The lender cannot take your home away as long as these obligations are met.
When the borrower passes away, the loan becomes due. Heirs typically have 6–12 months to settle the obligation, most commonly by selling the home and repaying the loan from the proceeds. If they prefer to keep the home, they can refinance or pay off the balance with other funds. Because HECM reverse mortgages are non-recourse loans, heirs will never owe more than the home's fair market value at the time of sale, even if the loan balance has grown beyond the home's worth. The FHA mortgage insurance covers the difference.
For a federally-insured HECM (Home Equity Conversion Mortgage), the minimum age is 62. If there are two borrowers, both must be at least 62. Some proprietary products have lower requirements, the HomeSafe Second is available starting at age 55, and the EquitySelect Second Lien is available starting at age 40, making senior home equity products accessible to a wider range of borrowers who are equity-rich but not yet HECM-eligible.
The amount you can borrow depends on three factors: your age (or the age of the youngest borrower), the current interest rate, and the appraised value of your home, up to the FHA lending limit, which for 2026 is $1,249,125 for HECM loans. Generally, the older you are and the more home value you have, the larger the amount available. Proprietary jumbo reverse mortgages can serve homes valued significantly above the FHA limit, with some products going up to $10 million or more in value. The specific amount available to you is determined during a no-cost evaluation.
Yes. You do not need to own your home free and clear. However, any existing mortgage must be paid off at closing, either from your own funds or from the reverse mortgage proceeds. What remains after paying off the existing loan is your available equity to use. If your current mortgage balance is large relative to your home's value, there may be limited net equity remaining after the payoff. A no-cost evaluation will run the numbers for your specific situation in minutes.
HECM stands for Home Equity Conversion Mortgage. It is the federally-insured reverse mortgage program administered by the FHA (Federal Housing Administration) and regulated by HUD (U.S. Department of Housing and Urban Development). HECMs are the most common type of reverse mortgage in the United States and carry government mortgage insurance that protects both the borrower (non-recourse protection) and the lender against losses if the loan exceeds home value. To obtain a HECM, borrowers must complete a mandatory counseling session with an HUD-approved counselor before application.
A HECM is FHA-insured, subject to government loan limits ($1,249,125 for 2026), and requires HUD-approved counseling. A proprietary (or "jumbo") reverse mortgage is a private product, not backed by FHA, which means it can exceed the HECM loan limit, making it suitable for higher-value homes. Proprietary products may have different eligibility requirements, fewer payout options, different cost structures, and different counseling requirements than FHA-backed products. The HomeSafe Second is an example of a proprietary product, and it differs further structurally by sitting in second-lien position rather than first.
A HECM for Purchase allows homeowners 62 and older to buy a new primary residence using a combination of a down payment and reverse mortgage proceeds, without taking on monthly principal-and-interest payments going forward. This product is particularly useful for seniors who want to downsize, move closer to family, or purchase a home better suited for aging in place without the burden of a monthly mortgage payment. The buyer typically contributes 40–60% of the purchase price as a down payment, depending on age and current interest rates. The remaining balance is funded by the reverse mortgage.
The five products available through SRM, what each one is, how it works, and who it's designed for.
The HomeSafe Second is a proprietary reverse second lien offered through Finance of America for homeowners age 55 and older who have an existing first mortgage they want to preserve. It provides a lump sum of cash with no monthly payment required, interest accrues over time and the balance becomes due when the borrower sells, permanently moves out, or passes away. It is non-recourse, meaning neither the borrower nor their heirs will owe more than the home's fair market value at payoff. Minimum loan: $50,000. Maximum: $4,000,000.
The HELOC for Seniors® is a proprietary home equity line of credit offered through Longbridge Financial for homeowners age 62 and older. Its defining feature is that it requires interest-only payments for the life of the loan, not just for a temporary draw period. This eliminates the payment shock that traditional HELOCs create when the draw period ends and principal repayment kicks in. Credit line: $50,000 to $400,000. An initial draw of at least 80% of available credit is required at closing.
A traditional HELOC has a 10-year draw period during which you make interest-only payments, followed by a repayment period, typically 10–20 years, where you pay both principal and interest. This transition often causes significant payment shock for borrowers on fixed retirement incomes. The HELOC for Seniors eliminates that cliff entirely: payments remain interest-only for the full life of the loan. The principal balance comes due only at a maturity event (sale, permanent move-out, or death), the same end-of-loan structure used in reverse mortgages.
The EquitySelect™ Second Lien is a second-lien home equity product offered through HighTech Lending that sits behind your existing first mortgage. It works like a flexible credit line where each month you choose how much to pay: a very low minimum (approximately 1% annualized), interest only, or more. Underwriting is equity-first with DTI (debt-to-income) tolerance up to 50%, specifically designed for borrowers whose income doesn't conform to standard W-2 documentation, such as self-employed borrowers, retirees, and investors. Available starting at age 40. Loan amounts: $75,000 to $3,000,000.
The Figure HELOC is a fixed-rate home equity line of credit from Figure Lending LLC notable for its speed: approval in approximately 5 minutes and funded proceeds in roughly 5 business days. It uses an automated valuation model (AVM) rather than a traditional appraisal, enabling a fully digital process. Loan amounts: $15,000 to $400,000. Repayment terms: 5 to 30 years. Despite being called a HELOC, it requires a 100% draw at closing, making it function more like a home equity loan than a revolving line. An origination fee of up to 4.99% applies.
A traditional HELOC allows you to draw funds gradually over a draw period (typically 10 years), paying interest only on what you've borrowed. The Figure HELOC requires that you draw 100% of your approved credit line at closing, so you borrow the full amount on day one and pay interest on all of it immediately. The trade-off is speed: no other home equity product in this market comes close to Figure's 5-day funding timeline. It also carries a fixed rate (unusual for HELOCs) and has a higher origination fee than most alternatives.
A home equity investment (HEI) is an arrangement where a company (such as Splitero, Point, or Hometap) gives you a lump sum of cash today in exchange for a percentage of your home's future appreciation. It isn't a traditional loan, there are no monthly payments. However, the true cost of the capital is often much higher than it appears: the company takes a share of appreciation on the full home value (not just their investment), and the products are largely unregulated with limited consumer protections. The CFPB has flagged HEIs as an area of consumer concern. Read a full, honest breakdown of how HEIs work →
The right product depends on your age, your existing mortgage balance, your credit and income profile, how much you need, and whether you want no payments, minimum payments, or full flexibility. The side-by-side comparison page gives a complete view of all five products across 19 dimensions. For a personalized recommendation, a no-cost phone call with David Rider will identify which products you qualify for and what the numbers look like in your specific situation, with no obligation.
Credit, income, property type, and what the lender is actually looking at when they evaluate your application.
HECM reverse mortgages do not have a published minimum credit score, but lenders conduct a Financial Assessment that reviews your credit history and evaluates your ability to meet ongoing property charge obligations going forward. Proprietary products have varying minimums: the HELOC for Seniors requires approximately 660; the EquitySelect requires approximately 620–640 (equity-driven underwriting); the Figure HELOC requires 640 minimum. The HomeSafe Second uses primarily equity-based underwriting. Lower credit does not necessarily disqualify you, it may narrow which products are available and at what terms.
HECM reverse mortgages have no minimum income requirement, but lenders complete a Financial Assessment to verify you can meet property charge obligations (taxes, insurance, maintenance) going forward. If there's a shortfall, the lender may set aside funds in a Life Expectancy Set-Aside (LESA) from your loan proceeds to cover these charges, funded from your available equity rather than requiring out-of-pocket payments. Among the second-lien products: the Figure HELOC uses standard DTI analysis; the HELOC for Seniors accommodates fixed retirement income; the EquitySelect has the highest DTI tolerance (up to 50%), making it the most accessible for variable or non-W2 income scenarios.
Yes, HUD requires all HECM borrowers to complete an independent counseling session with an HUD-approved counselor before moving forward with the application. The counselor is a neutral third party with no financial relationship to your lender. Sessions typically cost $125–$200 and can often be completed by phone. Proprietary products (HomeSafe Second, HELOC for Seniors) may have their own disclosure or counseling requirements. The Figure HELOC, as a conventional mortgage product, does not require reverse mortgage counseling.
Yes, but condominiums require an additional eligibility check. For HECM loans, the condo project must be listed in HUD's approved condominium database or meet the criteria for Single Unit Approval (a relatively recent FHA option that opens up eligibility to individual units even when the full project isn't approved). Proprietary reverse mortgage products, including the HomeSafe Second, may have different or more flexible condo eligibility requirements than FHA-backed products. Manufactured homes, co-ops, and certain property types have additional restrictions, confirming property eligibility is one of the first steps in any application.
The equity required varies by product. For a HECM in first-lien position, a rough rule of thumb is that your home needs to be owned free and clear or have a relatively low remaining mortgage balance relative to value. For the second-lien products, the key calculation is CLTV (combined loan-to-value), your existing first mortgage balance plus the new second-lien loan must not exceed the lender's CLTV threshold. The older the borrower, the more the lender can typically provide. A no-cost evaluation will calculate your specific numbers in minutes.
Yes, and it is generally advisable to include both spouses if both are 62 or older. When both spouses are co-borrowers on a HECM, the loan does not become due simply because one spouse passes away or moves to a care facility, the remaining borrower can continue to live in the home. If only one spouse is on the loan and that person passes away, the surviving spouse may be protected as an Eligible Non-Borrowing Spouse under HUD guidelines, but the protections are more limited. Discuss the co-borrower vs. non-borrowing spouse implications with a counselor and your originator before proceeding.
Honest answers to the hard questions about fees, interest, government benefits, and what can go wrong.
HECM reverse mortgage closing costs typically include: an origination fee (capped at the greater of $2,500 or 2% of the first $200,000 of home value, plus 1% above $200,000, max $6,000); an upfront FHA mortgage insurance premium (2% of the appraised value or loan limit, whichever is less); third-party closing costs (appraisal, title, recording, credit report); and a counseling fee (~$125–$200). Total closing costs commonly range from $5,000 to $20,000 depending on home value, and can typically be financed into the loan rather than paid out of pocket at closing. Proprietary products have different structures, the HomeSafe Second carries no FHA mortgage insurance premium, but may have its own fees.
HECM reverse mortgages are available in both fixed-rate and adjustable-rate versions. Fixed rates apply to lump sum draws; adjustable rates apply to line-of-credit and monthly payment options, and are tied to standard financial indices plus a lender margin. The HELOC for Seniors and HomeSafe Second are fixed-rate. The Figure HELOC is fixed-rate per draw. The EquitySelect has its own rate structure based on your equity and term. Current rates are disclosed in your Loan Estimate and depend on your specific loan, term, and market conditions at the time of application. Rates in the senior home equity space are generally comparable to or slightly above conventional second-lien rates.
Reverse mortgage proceeds are loan proceeds, not income, so they do not affect regular Social Security retirement or Medicare eligibility. However, they may affect Medicaid and SSI (Supplemental Security Income) eligibility if proceeds are not spent within the same month they are received. Accumulated proceeds sitting in a bank account can count as a countable asset for Medicaid and SSI purposes, which have strict asset limits. If you receive or anticipate applying for Medicaid or SSI, consult with an elder law attorney before taking reverse mortgage proceeds, ideally before you apply.
Paying property taxes, maintaining homeowners insurance, and keeping the home in reasonable condition are ongoing borrower obligations for any reverse mortgage or senior home equity loan. If you default on these obligations, the loan can be called due, which is the most common cause of reverse mortgage foreclosure. To protect borrowers who may struggle with these obligations, HECM lenders are required to conduct a Financial Assessment and may set aside a Life Expectancy Set-Aside (LESA) from your loan proceeds at closing to automatically cover property charges going forward, reducing the risk of future default.
No lender can force you out of your home simply for having a reverse mortgage. The loan is not callable while you continue to live in the home as your primary residence, meet your property charge obligations, and comply with loan terms. The loan becomes due only when you no longer occupy the home as your primary residence, whether because you sell, move to assisted living permanently, or pass away. Stories of lenders "taking" homes typically involve borrowers who stopped paying property taxes or insurance, or had a non-borrowing spouse situation with inadequate protections.
For HECM reverse mortgages, this scenario is specifically addressed by the non-recourse feature and the FHA mortgage insurance fund. If the loan balance at payoff exceeds the home's fair market value, neither the borrower nor their heirs owe the difference, the FHA mortgage insurance covers the lender's shortfall. Heirs can settle the loan by paying the lesser of the loan balance or 95% of the appraised value. The HomeSafe Second is also structured as a non-recourse product. For the second-lien products with payment requirements (HELOC for Seniors, Figure HELOC, EquitySelect), standard recourse rules may apply, confirm with your specific product terms.
Reverse mortgage proceeds are generally not taxable income because they are loan proceeds, not earnings. The interest that accrues on the loan is not deductible each year (unlike interest on a forward mortgage), it can only be deducted when it is actually paid, which typically occurs when the loan is repaid at the end of the loan term. For the second-lien products that require interest payments (HELOC for Seniors, Figure HELOC, EquitySelect), that interest may be deductible under standard home equity interest rules, subject to IRS limitations. Tax situations vary, consult your tax advisor for your specific circumstances.
State-specific questions that national websites rarely answer directly.
Yes. The HECM reverse mortgage is available in all 50 states, including Arizona. Among the proprietary second-lien products: the HELOC for Seniors® is available in Arizona; the EquitySelect Second Lien is available in Arizona among approximately 14 states; the Figure HELOC is available in nearly all states including Arizona; and the HomeSafe Second is available in select states (confirm current availability at application). David Rider is licensed in Arizona and works with clients throughout the Phoenix metro area, East Valley, Scottsdale, Tucson, Flagstaff, and statewide.
The FHA lending limit for HECM loans in 2026 is $1,249,125. This national limit means the HECM program calculates available equity up to this ceiling regardless of actual home value, so a home worth $2 million and a home worth $1.2 million would yield similar maximum loan calculations under the HECM program. For homeowners whose properties are valued well above this threshold, or where total equity access above the limit is the goal, proprietary jumbo reverse mortgage products may be more appropriate and should be evaluated alongside the HECM option.
Yes. Senior Resources Mortgage serves homeowners in Arizona, California, and Tennessee. Product availability varies by state: the EquitySelect™ Second Lien is available in California; the Figure HELOC is available in both California and Tennessee; the HELOC for Seniors® and HomeSafe Second availability should be confirmed at application for your specific state. The HECM reverse mortgage is available in all three states. For California clients specifically, particularly those in high-value coastal markets, jumbo reverse mortgage options may be especially relevant.
Arizona follows federal HECM guidelines for federally-insured reverse mortgages. For proprietary products, Arizona is a community property state, meaning both spouses typically have an ownership interest in property acquired during marriage, which affects title requirements and may require both spouses to sign certain documents even if only one is on the loan. Arizona also has its own homestead protections and anti-deficiency statutes that may interact with how a reverse mortgage loan is structured. These details are worked through during the title and escrow process, David works with experienced Arizona title companies familiar with senior home equity transactions.
About the CRMP credential, the referral process, CE classes for advisors, and what to expect.
CRMP stands for Certified Reverse Mortgage Professional, the only nationally recognized credential specifically for reverse mortgage practitioners in the United States, awarded by the National Reverse Mortgage Lenders Association (NRMLA). Earning the CRMP requires documented experience originating reverse mortgages, passage of a comprehensive written examination, and ongoing continuing education to maintain the designation. Fewer than 1,000 mortgage professionals nationally hold the CRMP. It is the senior home equity equivalent of a CFP in financial planning, a credential that signals specialized competency, not just a license to sell the product.
Any licensed mortgage broker can originate reverse mortgage loans, the license doesn't differentiate by specialty. A CRMP has taken the additional step of demonstrating documented proficiency in the reverse mortgage and senior home equity space through supervised experience, examination, and a formal credentialing process with ongoing education requirements. In a space where product misrepresentation has historically caused real harm to seniors, working with a credentialed specialist who can explain all your options, including when a product is not the right fit, matters significantly.
A warm introduction is the simplest path, an email or phone call, or you can have your client use the contact form on this site. David will have a no-cost, no-pressure conversation about their property, existing mortgage, income picture, and what they're trying to accomplish. He'll identify which products they qualify for, run the numbers, and give a clear recommendation, including an honest answer if none of the products is a good fit. If you're a financial advisor, CPA, or estate attorney making the referral, you'll be kept in the loop, and David won't cross into financial planning territory.
Yes. David offers CE-accredited education sessions for financial advisors and CPAs covering the senior home equity landscape, how HECMs work, where the five products in this comparison fit, and how home equity fits into a retirement income plan. Sessions are available one-on-one (30–45 minutes, no CE credit) or in group format where CE credit is available. These are practical, fact-based sessions, not sales pitches. The goal is to give advisors enough working knowledge to recognize a home equity situation, know which questions to ask, and make a confident referral. Contact David to schedule.
Yes. While David's specialty is the senior home equity and reverse mortgage space, he originates a full range of mortgage products through NEXA Lending. If none of the five products in this comparison is the right fit for a given situation, perhaps the borrower is too young, the equity position doesn't work, or a conventional solution is clearly better, David will evaluate those alternatives and help close the right loan. The goal is always to find the best answer, not to force a fit with a particular product.
No question is too basic and no situation is too complicated for a conversation. A 20-minute call is usually enough to know whether any of these products fits your situation, and what the numbers look like if they do.
Or download the full advisor booklet for a complete reference on all five products.
Download the Senior Second Mortgage Guide (PDF) →
Disclaimer: The information on this page is for educational purposes only and does not constitute financial, legal, or tax advice. Loan programs, eligibility requirements, rates, fees, and product availability are subject to change and vary by individual situation, lender, and state. All figures cited (loan limits, rates, program parameters) reflect information available at time of publication and should be confirmed at application. Reverse mortgage products involve accruing interest and fees that reduce home equity over time. Borrowers must remain in the home as their primary residence, maintain property taxes and insurance, and keep the property in good condition. Failure to comply may result in the loan becoming due and payable. Not all products are available in all states. This is not a commitment to lend. David Rider, NMLS #200787. Senior Resources Mortgage operates through NEXA Lending, an equal housing lender.