HECM Reverse Mortgage

A HECM reverse mortgage (pronounced “heck-um”) is a Home Equity Conversion Mortgage — the only reverse mortgage insured by the U.S. federal government. HUD states that a HECM is available only through an FHA-approved lender. It lets qualifying homeowners age 62 or older withdraw a portion of their home equity without selling the home or making a required monthly mortgage payment.

The loan does not require repayment as long as at least one borrower lives in the home as their primary residence and meets loan obligations — including paying property taxes, homeowner’s insurance, and maintaining the property. HUD notes that HECM borrowers may reside in their homes indefinitely while those property charges stay current. For a broader plain-English introduction, see our What Is a HECM? guide.

The CFPB describes a HECM as the most common type of reverse mortgage and notes that, like a traditional mortgage, the title to your home remains in your name. You do not make monthly mortgage payments. Interest and fees are added to the loan balance each month, so the balance grows and home equity decreases. The loan is repaid when you no longer live in the home. You still have to pay property taxes and homeowners insurance, use the home as your principal residence, and keep the house in good condition.

• ✓Only reverse mortgage insured by the U.S. federal government (HUD / FHA)
• ✓Available only through an FHA-approved lender
• ✓At least one borrower must be age 62 or older
• ✓The home must be your primary residence
• ✓No required monthly mortgage payment; property taxes, insurance, and upkeep still apply
• ✓HUD-approved counseling is required before the loan can close
• ✓You keep the title; the loan is repaid when you no longer live in the home

HUD states that the amount available for withdrawal varies by borrower and depends on the age of the youngest borrower or eligible non-borrowing spouse, the current interest rate, and the lesser of the appraised value, the HECM FHA mortgage limit, or the sales price.

A HECM must be secured by your primary residence— the home where you live most of the year. HUD requires you to certify occupancy annually, and your servicer may follow up if it cannot confirm you’re still living in the home.

Temporary absences — for a hospital stay, rehabilitation, or an extended visit with family, for example — are generally accommodated for a limited period under FHA rules without affecting your loan. If you expect to be away from the home for an extended stretch, contact your servicer proactively; unresolved, extended absences can eventually trigger due-and-payable status, the same as selling or permanently moving out would.