I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’ve helped California seniors use reverse mortgages to eliminate financial stress, fund long-term care, purchase new homes, and leave their existing homes to their families in better financial shape. Call (800) 239-1103.
What Is a Reverse Mortgage?
A reverse mortgage is a loan that lets homeowners 62+ convert home equity into cash — without selling the home or making monthly mortgage payments. The loan is repaid when you sell the home, move out permanently, or pass away. The most common type is the HECM (Home Equity Conversion Mortgage), insured by FHA. California also has access to jumbo reverse mortgages (proprietary products) for high-value homes above the HECM lending limit.
Key protections built into every FHA-insured HECM:
- You remain the homeowner and on title
- You can never owe more than the home’s value (non-recourse loan)
- Your heirs are not personally responsible for any shortfall
- You must continue to pay property taxes, insurance, and maintain the home
How Much Can You Borrow?
Your loan amount depends on three factors: your age (or the age of the younger co-borrower), current interest rates, and your home’s value (up to the 2026 HECM lending limit of $1,209,750). The older you are and the lower the interest rate, the more you can access.
| Age | Home Value $1M | Approx. Available Proceeds* |
|---|---|---|
| 62 | $1,000,000 | ~$400,000–$480,000 |
| 70 | $1,000,000 | ~$480,000–$550,000 |
| 75 | $1,000,000 | ~$520,000–$600,000 |
| 80 | $1,000,000 | ~$570,000–$640,000 |
*Approximate estimates; actual amounts depend on current rates and program. Contact DiVita Home Finance for a personalized calculation.
HECM vs. Jumbo Reverse Mortgage
California’s high home values often push borrowers into jumbo reverse mortgage territory — proprietary products not insured by FHA that can access equity on homes valued at $2M, $3M, or $5M+. Here’s how they compare:
| Feature | HECM (FHA-Insured) | Jumbo Reverse Mortgage |
|---|---|---|
| FHA Insurance | Yes | No |
| Lending Limit | $1,209,750 (2026) | Up to $6M+ |
| Min. Age | 62 | 55–62 (varies by lender) |
| MIP Required | Yes (2% upfront + 0.5% annual) | No |
| Best For | Homes under $1.5M | Higher-value CA homes |
| Counseling Required | Yes (HUD-approved) | Often required |
How You Can Receive the Money
HECM borrowers choose how to receive their equity access:
- Lump sum: One-time payout at closing (only available with fixed-rate HECM; limited to principal limit at closing)
- Monthly payments: Tenure (for life) or term (fixed number of years)
- Line of credit: Draw when needed; unused portion grows over time at the same rate as the loan
- Combination: Monthly payments plus a line of credit
The line of credit option is often the most strategically powerful for California seniors — the unused credit line grows over time, regardless of what happens to home values, giving you access to more funds in later years when you may need it most.
HECM for Purchase — Buy a New California Home at 62+
The HECM for Purchase program lets you buy a new home with a reverse mortgage — typically using proceeds from selling your existing home to cover the required down payment (generally 40%–60% of the purchase price depending on your age). You own the new home outright with no monthly mortgage payment. This is an excellent strategy for California seniors who want to downsize, relocate to a different city, or move closer to family without creating a new monthly payment obligation.
California Reverse Mortgage FAQs
Do I have to give up my home to get a reverse mortgage?
No. You remain the homeowner and on title throughout the life of the reverse mortgage. The loan is repaid when you sell, move out permanently, or pass away. Your heirs can pay off the loan balance and keep the home, sell the home and use proceeds to repay the loan, or simply let the lender sell the home to satisfy the debt — with no personal liability for any remaining balance above the home’s value.
Are reverse mortgage proceeds taxable in California?
No. Reverse mortgage proceeds are loan advances, not income, and are not subject to federal or California income tax. However, they may affect your eligibility for need-based government programs like Medi-Cal if the funds are not spent in the month received and remain in your bank account as an asset. Consult a tax advisor or elder law attorney for your specific situation.
Can my heirs keep the home after I pass away?
Yes. Your heirs have 6–12 months (typically up to 12 months with extensions) after your passing to repay the reverse mortgage and keep the home. They can refinance with a conventional mortgage, pay cash, or use life insurance proceeds. If the home’s value is less than the loan balance, they owe nothing — the FHA insurance covers the shortfall for HECM loans. For jumbo reverse mortgages, the non-recourse feature also protects heirs from personal liability.
What are the costs of a reverse mortgage in California?
HECM costs include a 2% upfront FHA mortgage insurance premium (MIP), origination fees (capped at $6,000 for HECMs), closing costs (appraisal, title, escrow — similar to a conventional refinance), and a 0.5% annual ongoing MIP. These costs can be financed into the loan so there are typically no out-of-pocket costs. Jumbo reverse mortgages have no MIP but may have higher rates. DiVita Home Finance provides a full cost breakdown before you commit.
What happens if my loan balance exceeds my home’s value?
For FHA-insured HECMs, the non-recourse feature means you (or your heirs) will never owe more than the home is worth. If the loan balance exceeds the home’s value at repayment, FHA covers the difference using mortgage insurance premiums collected over the life of the loan. Neither you nor your estate is responsible for any shortfall.
Related California Reverse Mortgage Resources
- HECM Reverse Mortgage California 2026 — Complete guide to FHA-insured HECM loans, 2026 lending limits, and payout options
- Jumbo Reverse Mortgage California — For homes over $1.2M: compare jumbo vs. HECM proceeds side by side
- HECM for Purchase California — Buy a new California home at 62+ with no monthly mortgage payments
- California Reverse Mortgage Guide — Overview of all reverse mortgage options for California seniors
- Reverse Mortgage Pros and Cons 2026
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
