Reverse Mortgages in California: 2026 Guide for Homeowners 62+

A reverse mortgage lets California homeowners 62 and older turn part of their home equity into tax-free cash without selling the home or making monthly mortgage payments. The loan is repaid when the last borrower sells, moves out permanently or passes away. You keep title, and you keep paying property taxes, insurance and upkeep.

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’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. I compare FHA-insured HECMs and private jumbo reverse mortgages side by side, and I’ll tell you honestly when a reverse mortgage isn’t the right answer. Call (800) 239-1103.

How a Reverse Mortgage Works

With a regular mortgage you pay the lender and the balance goes down. With a reverse mortgage the lender pays you — as cash, a line of credit or monthly payments — and the balance goes up as interest and mortgage insurance accrue. Nothing is due while at least one borrower (or an eligible non-borrowing spouse) lives in the home as a primary residence and keeps up with taxes, insurance and maintenance.

When the loan comes due, the home is usually sold and the loan repaid; anything left belongs to you or your heirs. Most reverse mortgages are the FHA-insured Home Equity Conversion Mortgage (HECM). For higher-value homes there are private jumbo (proprietary) reverse mortgages.

Who Qualifies

• Age: the youngest borrower must be 62 or older for a HECM. Some proprietary programs start at 55.
• Primary residence: not a vacation home or rental.
• Equity: enough that the reverse mortgage can pay off any existing mortgage — often around half the home’s value or more, depending on age and rates.
• Property: single-family homes, 2–4 unit homes where you live in one unit, FHA-approved condos (or single-unit approval), and manufactured homes built after June 15, 1976 on a permanent foundation and titled as real property.
• Financial assessment: the lender reviews credit, income and your history of paying taxes and insurance. If there are concerns, part of the proceeds may be set aside to pay them (a Life Expectancy Set-Aside, or LESA).
• Counseling: a session with an independent HUD-approved counselor is required. Find one through HUD at (800) 569-4287.

How Much Can You Get?

Your principal limit is a percentage of your home’s value (up to the HECM limit) set by HUD tables. It depends on the age of the youngest borrower or eligible non-borrowing spouse and on the expected interest rate: older borrowers and lower rates get more.

2026 HECM limit: HUD will use a home value of up to $1,249,125 for case numbers assigned January 1 – December 31, 2026. A $2 million home is treated as $1,249,125 for a HECM.

*Illustration using HUD principal limit factors at a 6.375% expected rate. Upfront mortgage insurance, closing costs and any existing mortgage payoff come out of this amount. Actual figures change with rates — I’ll run your exact numbers.

In the first 12 months you can generally take up to 60% of the principal limit — or, if greater, the amount needed to pay off existing liens and required costs plus 10% of the principal limit.

Ways to Receive the Money

• Line of credit: draw what you need, when you need it. On a HECM, the unused portion grows at the same rate as the loan balance (the interest rate plus the 0.5% annual mortgage insurance), and it can’t be frozen or reduced because home values fall, as long as you meet the loan terms.
• Monthly payments: for life while you live in the home (tenure) or for a set number of months (term).
• Combination: monthly payments plus a line of credit.
• Lump sum: the fixed-rate HECM is paid as a single draw at closing.
• Pay off an existing mortgage: a common use — it ends the monthly payment.

Line of credit, monthly and combination options require an adjustable-rate HECM.

What It Costs

• FHA mortgage insurance (HECM): 2% of the home value used (up to the limit) at closing, plus 0.5% a year on the balance. On a home at the 2026 limit, the upfront premium is about $24,980.
• Origination fee: capped by HUD at 2% of the first $200,000 of value plus 1% above that, with a $2,500 minimum and a $6,000 maximum.
• Third-party costs: appraisal, title, escrow and recording.
• Counseling fee — often waived if you can’t afford it.

Most costs can be financed into the loan. Because the upfront costs are real, a reverse mortgage usually makes the most sense if you plan to stay in the home for years.

Can You Lose Your Home?

Not because the balance grows, home values fall or the lender wants its money back. A reverse mortgage becomes due and can end in foreclosure only if the borrower:

• stops paying property taxes, homeowners insurance or HOA dues;
• doesn’t maintain the home;
• no longer lives there as a primary residence — including being away more than 12 consecutive months for health reasons such as a care facility; or
• transfers title without the lender’s approval.

Planning for taxes and insurance — with a LESA if necessary — is the single most important safeguard.

Spouses Under 62

If one spouse is 62+ and the other is younger, the older spouse can be the borrower and the younger one an eligible non-borrowing spouse. After the borrower dies, an eligible non-borrowing spouse can stay in the home with the loan deferred, as long as they were married at closing, remain in the home as their primary residence and keep paying taxes, insurance and upkeep. Two trade-offs: proceeds are calculated on the younger spouse’s age, so they’re lower, and the surviving non-borrowing spouse can’t draw any remaining line of credit.

When the Loan Comes Due: Heirs’ Options

• Sell the home, repay the loan and keep any remaining equity.
• Keep the home by paying off the loan — for a HECM, the payoff is the lesser of the loan balance or 95% of the current appraised value.
• Walk away through a deed in lieu if the loan exceeds the value. HECMs are non-recourse: FHA insurance covers any shortfall, and heirs don’t owe the difference.

Heirs should contact the servicer promptly. HUD rules generally allow 30 days to respond after the loan is called due and six months to sell or pay off, with possible extensions of up to two 90-day periods while actively working on a sale or payoff.

Condos, Manufactured Homes and Leased Land

• Condos: a HECM requires an FHA-approved project or FHA single-unit approval, which looks at owner-occupancy, delinquencies, reserves, insurance and litigation. If yours doesn’t qualify, a jumbo reverse mortgage often has more flexible condo rules.
• Manufactured homes: must be built after June 15, 1976, on a permanent foundation and titled as real property.
• Leased land (for example, parts of Palm Springs): HECMs are possible on leasehold property, but the lease term must meet FHA requirements. Check the lease before you apply. See Palm Springs leased-land mortgages.

Taxes and Benefits

• Not taxable income: reverse mortgage advances are loan proceeds, so they aren’t income for federal or California tax purposes.
• Social Security and Medicare: not affected.
• SSI and Medi-Cal: proceeds aren’t income, but money you keep past the month you receive it can count as a resource. SSI’s resource limit is $2,000 for an individual. Medi-Cal reinstated an asset limit on January 1, 2026 — $130,000 for one person plus $65,000 for each additional household member — and your home is exempt. Drawing from a line of credit only as needed avoids piling up countable cash.
• Interest deduction: interest isn’t deductible as it accrues; it may be deductible when actually paid, usually at payoff, subject to the normal home mortgage interest rules. Ask your CPA.

California Protections

• 7-day waiting period: under Civil Code §1923.2, a lender can’t accept a final application or charge fees until seven days after your counseling session.
• No required annuities: no one involved in originating the loan can require you to buy an annuity or refer you to buy one or other financial or insurance products before closing.
• Right to cancel: on a reverse mortgage refinance of your home, federal law gives you three business days after closing to rescind.

Red flags: anyone claiming to be from HUD or FHA calling unsolicited, a contractor who arranges your reverse mortgage to pay for their work, pressure to sign quickly, requests to put someone else on title, or large fees before closing. For suspected elder financial abuse, contact Adult Protective Services or the California Attorney General.

Reverse Mortgage vs. the Alternatives

• HELOC: cheaper to open but requires monthly payments, income to qualify, and the line can be frozen. See reverse mortgage vs. HELOC.
• Selling and downsizing: frees up equity with no loan at all. If you still want to own, HECM for Purchase can buy the next home with no monthly mortgage payment. Proposition 19 may let homeowners 55+ transfer their property tax base; see our Prop 19 guide.
• Cash-out refinance: larger monthly payment, but less balance growth. See HELOC vs. cash-out refinance.

A reverse mortgage usually fits best if you plan to stay put for years, want to eliminate a mortgage payment or add a reliable reserve, and are comfortable leaving less equity to heirs. It fits poorly if you may move soon or can’t keep up with taxes and insurance.

Where I Help Clients

I work with homeowners throughout California — Marin County, San Francisco, the East Bay, San Jose and Silicon Valley, Sonoma and Napa, Sacramento, Los Angeles, Orange County, San Diego and the Palm Springs area. In higher-value markets like Marin and San Francisco, it’s worth comparing a HECM with a jumbo reverse mortgage because the HECM only counts value up to $1,249,125.

Frequently Asked Questions

What is the 2026 reverse mortgage limit in California?

For a HECM, the 2026 maximum claim amount is $1,249,125, the same everywhere in the country. It’s the most home value HUD will use to calculate your proceeds, so a more valuable home is treated as worth $1,249,125. Private jumbo reverse mortgages can use higher values.

How much money can I get from a reverse mortgage?

It depends on the youngest borrower’s age, current rates and the home value up to the limit. At a 6.375% expected rate, HUD’s factors give roughly 34% of value at age 62, about 43% at 75 and about 47% at 80, before upfront mortgage insurance, closing costs and any existing mortgage payoff.

Do I have to make monthly payments on a reverse mortgage?

No mortgage payments are required. You must keep paying property taxes, homeowners insurance and any HOA dues, and maintain the home. You can make voluntary payments to slow the balance growth.

Can I get a reverse mortgage if I still have a mortgage?

Yes, if the reverse mortgage proceeds are enough to pay it off at closing. Paying off an existing mortgage and eliminating the monthly payment is one of the most common reasons California homeowners use a reverse mortgage.

What happens to a reverse mortgage when I die?

The loan becomes due when the last borrower dies, unless an eligible non-borrowing spouse still lives in the home. Heirs can sell and keep any equity, keep the home by paying the lesser of the balance or 95% of appraised value, or hand the property over if it’s worth less than the loan. HECM heirs never owe the shortfall.

Does California have extra reverse mortgage protections?

Yes. A lender can’t accept a final application or charge fees until seven days after your counseling session, and no one involved in the loan can require you to buy an annuity or steer you into annuities or insurance products before closing.

Related Resources

• Jumbo Reverse Mortgages
• HECM for Purchase
• Reverse Mortgage vs. HELOC
• HELOCs in California
• Proposition 19 Property Tax Transfers
• Propositions 60 and 90
• Mortgages and Living Trusts