A reverse mortgage lets California homeowners 62 and older convert a portion of their home equity into tax-free cash — without selling the home or making monthly mortgage payments. It’s one of the most powerful but misunderstood financial tools available to seniors, and DiVita Home Finance has been helping California homeowners use it correctly since 2007.
How Does a Reverse Mortgage Work?
With a traditional mortgage, you make payments to the lender and your loan balance goes down over time. A reverse mortgage works in reverse — the lender pays you, and your loan balance grows over time. The loan doesn’t come due until you sell the home, move out permanently, or pass away. At that point, the home is sold and the loan is repaid. Any remaining equity goes to you or your heirs.
You remain the owner of the home throughout. You’re still responsible for property taxes, homeowner’s insurance, and basic maintenance — but there are no required monthly mortgage payments.
Who Qualifies for a Reverse Mortgage in California?
- Age: At least one borrower must be 62 or older
- Primary residence: Must be your primary home (not a vacation home or rental)
- Equity: You must have substantial equity — typically 50% or more
- Property type: Single-family homes, FHA-approved condos, manufactured homes (on owned land), 1–4 unit properties where you occupy one unit
- Financial assessment: Lender reviews income, credit, and expenses to ensure you can maintain taxes and insurance
- HUD counseling: Required — a brief session with an independent HUD-approved housing counselor before proceeding
How Much Can You Borrow?
The amount you can access depends on three factors: your age (older = more), your home’s appraised value, and current interest rates. As a general guide:
| Age | Home Value | Approx. Available (Principal Limit) |
|---|---|---|
| 62 | $800,000 | ~$300,000 – $380,000 |
| 70 | $800,000 | ~$360,000 – $430,000 |
| 75 | $1,000,000 | ~$480,000 – $560,000 |
| 80 | $1,200,000 | ~$640,000 – $720,000 |
Estimates only. Actual amounts vary based on current rates and home value.
Ways to Receive Your Money
You choose how to receive your reverse mortgage proceeds:
- Lump sum — One large payment at closing (fixed rate only)
- Monthly payments — Steady income stream for a set term or as long as you live in the home
- Line of credit — Draw what you need, when you need it. Unused funds grow over time.
- Combination — Mix of monthly payments plus a line of credit
The line of credit option is one of the most underappreciated features — it grows at the same rate as the loan’s interest rate, meaning the longer you don’t use it, the more available to you.
HECM vs. Jumbo Reverse Mortgage
| HECM (FHA) | Jumbo / Proprietary | |
|---|---|---|
| Max Home Value | $1,209,750 (2026 FHA limit) | Up to $4M+ |
| Insurance | FHA-insured (MIP required) | Private lender — no MIP |
| HUD Counseling | Required | Varies by lender |
| Best For | Homes under $1.2M | High-value CA properties |
For California homeowners with higher-value properties — especially in Marin, San Francisco, or the Bay Area — a jumbo reverse mortgage often provides significantly more proceeds than the FHA HECM.
What Happens to the Home When You Pass Away?
Your heirs have options. When the loan comes due, they can:
- Sell the home and use proceeds to repay the loan, keeping any remaining equity
- Refinance into a traditional mortgage to keep the home
- Walk away — because HECMs are non-recourse loans, heirs are never responsible for more than the home’s value, even if the loan balance exceeds it
Common Reverse Mortgage Myths
“The bank owns my home.” False. You remain on title as the owner throughout the life of the loan.
“My heirs will inherit debt.” False. The HECM is a non-recourse loan. Heirs are never liable for more than the home is worth.
“I could be forced out of my home.” Only if you fail to pay property taxes, homeowner’s insurance, or stop maintaining the home as your primary residence. As long as you meet those obligations, you cannot be forced out.
“Reverse mortgages are only for desperate people.” Financial planners increasingly recommend reverse mortgages as a strategic retirement income tool — particularly the line of credit — for homeowners with substantial equity.
Is a Reverse Mortgage Right for You?
A reverse mortgage makes the most sense when you:
- Plan to stay in your home long-term
- Need to supplement Social Security or retirement income
- Want to eliminate an existing mortgage payment
- Need funds for healthcare, home modifications, or living expenses
- Want a growing line of credit available for future needs
It makes less sense if you plan to move within a few years or want to maximize inheritance to heirs.
Get a Free Reverse Mortgage Consultation
Michael DiVita has been helping California homeowners navigate reverse mortgages since 2007. We’ll walk you through the numbers with zero pressure — so you can make a fully informed decision.
📞 800-239-1103
🌐 mycahomeloan.com
NMLS #323700 | California DRE #01818285
