What Is a HECM Reverse Mortgage?
A HECM (Home Equity Conversion Mortgage) is the only federally insured reverse mortgage in the United States, backed by the FHA and regulated by HUD. For California seniors 62 and older, it’s the safest, most structured path to converting home equity into tax-free income — without monthly mortgage payments and without giving up ownership of your home.
DiVita Home Finance has been originating HECM loans for California homeowners since 2007. With access to 40+ wholesale lenders, we find the most competitive HECM rates available in the market — not just one lender’s product.
2026 HECM Lending Limit: $1,209,750
For 2026, the FHA-set HECM lending limit is $1,209,750. This is the maximum home value the FHA will use when calculating your available proceeds — even if your home is worth $2M or $3M. If your California home is valued above this threshold, a jumbo reverse mortgage may allow you to access significantly more equity.
| Home Value | HECM Cap Applied | Best Option |
|---|---|---|
| Under $1,209,750 | Full value used | HECM |
| $1,209,750 – $2,500,000 | Capped at $1,209,750 | HECM or Jumbo |
| Over $2,500,000 | Capped at $1,209,750 | Jumbo Reverse |
HECM Eligibility Requirements
- Youngest borrower must be 62 or older
- Home must be your primary residence
- Typically need 50%+ equity (more equity = more proceeds)
- Must complete HUD-approved counseling (~$125–$150 fee)
- Must remain current on property taxes, insurance, and maintenance
- Financial assessment by lender (ability to pay taxes/insurance)
Eligible Property Types
The HECM loan works for: single-family homes, 2–4 unit properties (owner-occupied), FHA-approved condominiums, and eligible manufactured homes. Vacation homes and investment properties do not qualify.
How Much Can You Receive? (Principal Limit)
Your available HECM proceeds — called the Principal Limit Factor (PLF) — depend on three variables:
- Age of youngest borrower: older = more proceeds
- Current expected interest rate: lower rates = more proceeds
- Home value or HECM limit (whichever is lower)
As a rough guide, a 70-year-old with a $1M home may access $400,000–$550,000 in proceeds depending on current rates. A 78-year-old with the same home may access $550,000–$650,000.
5 Ways to Receive Your HECM Proceeds
- Lump sum (fixed rate only) — all proceeds at closing
- Tenure payments — equal monthly payments for as long as you live in the home
- Term payments — equal monthly payments for a set number of months
- Line of credit — draw funds as needed; unused credit grows over time
- Combination — monthly payments plus a line of credit
The growing line of credit is one of the most underutilized features of the HECM — the unused portion grows at the same rate as your loan interest, giving you more available funds the longer you wait to draw.
HECM Costs to Know
- FHA Mortgage Insurance Premium (MIP): 2% upfront + 0.5% annually
- Origination fee: capped by HUD (max $6,000)
- Third-party closing costs: appraisal, title, escrow (similar to forward mortgage)
- HUD counseling fee: ~$125–$150
Most costs can be financed into the loan — no out-of-pocket required at closing for most borrowers.
HECM Protections You Should Know
The HECM is a non-recourse loan. If your home sells for less than the loan balance, neither you nor your heirs owe the difference — the FHA insurance covers it. Your heirs can also pay off the loan at 95% of appraised value and keep the home.
A non-borrowing spouse under age 62 can remain in the home after the borrowing spouse passes, provided they meet eligibility requirements established at origination.
HECM for Purchase: Buy a New Home Without Monthly Payments
The HECM for Purchase (H4P) lets seniors buy a new primary residence using a reverse mortgage — combining a down payment with HECM proceeds so there are no monthly mortgage payments on the new home. This is ideal for downsizing or relocating in retirement. Learn more about HECM for Purchase in California →
Frequently Asked Questions
Do I still own my home with a HECM?
Yes. You retain title to your home throughout the life of the HECM loan. The lender has a lien, but you own the property.
What if I outlive the loan?
As long as one borrower lives in the home, pays taxes and insurance, and maintains the property, the loan does not come due. There is no term limit on a HECM — it cannot expire while you’re in the home.
How does the HECM affect my heirs?
When the last borrower passes or leaves the home, heirs can sell the home and keep any remaining equity, or pay off the loan (at 95% of appraised value) to keep the property. If the home is worth less than the loan balance, FHA insurance covers the difference.
Will a HECM affect Social Security or Medicare?
No. HECM proceeds are loan proceeds, not income — they do not affect Social Security or Medicare benefits. Consult your tax advisor regarding Medicaid if applicable.
What is the 3-day right of rescission?
After closing, you have 3 business days to cancel a HECM on your primary residence for any reason with no penalty.
Get Your Free HECM Consultation
We’ll calculate your estimated proceeds, compare rate options, and answer every question — no obligation.
📞 800-239-1103 Get My HECM EstimateDiVita Home Finance | NMLS #323700 | CA DRE #01818285 | Serving all of California since 2007
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
