If you own a home in California and you’re 62 or older, you may be sitting on hundreds of thousands of dollars in equity that’s doing nothing for your retirement. A reverse mortgage lets you access that equity as tax-free cash — without selling your home or making monthly mortgage payments. Here’s exactly how it works.
The Basic Concept
A traditional mortgage works in one direction: you borrow money to buy a home and make monthly payments until the loan is paid off. A reverse mortgage works in the opposite direction. Instead of you paying the lender, the lender pays you — drawing from the equity you’ve already built. Your loan balance grows over time rather than shrinking, and the loan isn’t repaid until you sell, move out permanently, or pass away.
Crucially: you remain the owner of your home. Your name stays on the title. You can never be forced out as long as you pay your property taxes, maintain homeowner’s insurance, and keep the home as your primary residence.
Two Types: HECM and Jumbo Reverse Mortgage
There are two main reverse mortgage products available in California:
HECM (Home Equity Conversion Mortgage)
The HECM is FHA-insured and the most common reverse mortgage. The 2026 FHA lending limit is $1,209,750 — which covers a large portion of California homes. It comes with required HUD counseling and FHA mortgage insurance premiums (MIP), but the insurance protects both you and your heirs: if your loan balance ever exceeds the home’s value, FHA covers the difference.
Jumbo Reverse Mortgage (Proprietary)
For California homeowners with higher-value properties — particularly in Marin County, San Francisco, the Peninsula, or other premium markets — a jumbo reverse mortgage can unlock significantly more equity. These are private lender products on homes valued up to $4 million or more. No FHA mortgage insurance means lower costs, and the higher loan amounts make them ideal for luxury California properties. DiVita Home Finance offers jumbo reverse mortgages alongside HECM.
Step-by-Step: How the Process Works
- Free consultation. We review your age, home value, existing mortgage balance, and goals to see how much you can access and which product fits best.
- HUD counseling (HECM only). A brief independent counseling session — typically by phone — required by FHA. Usually takes 60–90 minutes.
- Application and appraisal. We order a full home appraisal to confirm value, then submit the loan package to the lender.
- Underwriting. The lender reviews your financial assessment — income, credit, tax payment history — to confirm you can maintain property charges.
- Closing. You sign final loan documents, typically with a notary at your home or a title company.
- 3-day right of rescission. Federal law gives you 3 business days after closing to cancel with no penalty.
- Funds disbursed. After rescission, funds are released in your chosen format — lump sum, monthly payments, line of credit, or a combination.
What You Pay — and What You Don’t
No required monthly payments. Interest accrues and adds to your loan balance, but you make zero required payments. You can always make voluntary payments to keep the balance from growing.
You do pay: property taxes, homeowner’s insurance, HOA dues if applicable, and basic home maintenance. These are the conditions for keeping the loan in good standing.
When Does the Loan Come Due?
The reverse mortgage becomes due when:
- You sell the home
- The last borrower moves out of the home permanently (including moving to assisted living for 12+ consecutive months)
- The last borrower passes away
- You fail to pay property taxes or insurance (default)
When the loan comes due, the home is typically sold and the loan repaid from the proceeds. Any equity remaining after repayment belongs to you or your heirs. And because reverse mortgages are non-recourse loans, heirs are never on the hook for more than the home’s value — even if the loan balance grew larger.
Ready to See Your Numbers?
DiVita Home Finance offers free reverse mortgage consultations with no pressure. We’ll run your specific numbers — both HECM and jumbo — so you can compare your options side by side.
📞 800-239-1103 | mycahomeloan.com/reverse-mortgage-california | NMLS #323700
