Your top reverse mortgage questions — answered.

To become eligible for a reverse mortgage, you must be at least 62 years old and own your home. You must have sufficient equity to pay off any outstanding balances, and your home must be your principal residence. All applicants are subject to a financial assessment to determine their financial capacity and willingness to meet the loan obligations.

The amount depends on your age at closing, your home's value, any existing liens, and current interest rates. HUD limits borrowers to 60% of available funds in the first year. The remaining funds are accessible starting in year two. Specifically, the first-year maximum is the greater of:

1. 60% of the Principal Limit in the first twelve months from closing, OR
2. The sum of Mandatory Obligations (existing mortgage payoff, tax liens, closing costs, mortgage insurance premium) plus 10% of the Principal Limit — not to exceed the total Principal Limit at closing.

You can take the money as a lump sum (up to HUD's first-year maximum), set up a line of credit, receive monthly payments, or use a combination of all three. In the first year, the line of credit or monthly payments cannot exceed 60% of the Principal Limit. After the first year, the available amounts increase when applicable.

Fees include an origination fee paid to the broker or lender, a Mortgage Insurance Premium (MIP) paid to FHA on HECM loans, an appraisal fee, flood certification fee, document preparation fee, and title, settlement, and escrow fees. All costs are clearly shown on the Loan Estimate. Monthly servicing fees may also apply.

FHA requires a Mortgage Insurance Premium (MIP) collected at closing and annually during the life of the loan. The upfront MIP is calculated using your home's appraised value or a maximum of $1,249,125 — the 2026 national HECM lending limit. The ongoing FHA insurance premiums are calculated monthly based on the outstanding loan balance.

Yes. Counseling is required with an independent, HUD-approved third-party counselor. This protects borrowers by ensuring they receive accurate, unbiased information. The lender must receive the counseling certificate before the loan can close. To locate a reverse mortgage counselor near you, call 1-800-569-4287 or contact Jenn directly.

Reverse mortgage proceeds are generally not subject to individual income taxation. However, you should consult your tax advisor for guidance specific to your situation, especially if you receive needs-based government benefits such as Medicaid or Medi-Cal.

A reverse mortgage is designed so borrowers don't have to pay most fees out of pocket during the life of the loan. Typical upfront costs are the appraisal and HUD counseling fee (some agencies waive the counseling fee for qualifying applicants). There may be a monthly servicing fee which is financed and added to the loan balance rather than paid out of pocket.