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A home equity conversion mortgage (HECM) is the most common type of reverse mortgage. Backed by the Federal Housing Administration, HECMs are reserved for homeowners who are 62 and older.
This type of loan allows you to borrow against some of your home equity without having to make payments. Instead, the loan is paid off after you move out or die, or when your heirs sell the home.
In exchange, you’ll receive a lump sum payment, monthly disbursement or a line of credit. As long as you continue to pay your property taxes and homeowners insurance, you can continue to live in the house for the rest of your life.
Who should get a home equity conversion mortgage?
A HECM reverse mortgage might be a good fit if you need cash flow to keep up with general living expenses. A reverse mortgage may also make sense if you need to pay for home repairs or renovations and don’t expect to be able to pay off the loan yourself.
If you do have enough cash flow to make regular loan payments, you might consider a home equity loan or a HELOC instead of a reverse mortgage (particularly if you’d prefer to keep your property within the family).
» MORE: Best home equity loan lenders
Where to get a reverse mortgage
Since HECMs are backed by the Federal Housing Administration, you’ll have to choose an FHA-approved lender. You can search the administration’s database of lenders here.
Non-HECM reverse mortgage lenders offer their own products, but they don’t have the same consumer protections as HECMs.
Requirements to qualify for a HECM
You must meet the following FHA requirements to get a HECM:
- Be 62 or older. If you have a spouse who’s under 62, you can still qualify, but they won’t be listed on the loan (and their age might affect the amount you’re eligible to receive).
- Live in the home as your primary residence.
- Have no delinquent federal debts.
- Own your home outright (without a mortgage) or have a low mortgage balance.
- Attend a mandatory counseling session with a HECM counselor approved by the Department of Housing and Urban Development.
- Meet all FHA property standards.
- Continue paying all property taxes, homeowners insurance and other household maintenance costs as long as you live in the home.
Getting cash from a reverse mortgage
The FHA’s HECM maximum borrowing limit for 2026 is $1,249,125. However, the amount you can qualify to borrow depends on your age, home value and interest rate.
You can choose how you want to receive your loan payments. The FHA offers two reverse loan types: an adjustable-rate mortgage (ARM) and a fixed-rate mortgage.
With an ARM, you can receive fixed payments every month, or open a line of credit that you can draw from as needed. If you need help paying your regular bills, you’ll likely want the fixed monthly payments. If you have larger expenses you need to pay off (such as a series of home repairs), a line of credit may be more useful.
With a fixed-rate reverse mortgage, you’ll get a one-time lump sum after you close on your loan. This means you’ll be responsible for paying interest and fees on the entire amount at once, which can make it a more expensive option. This might be a fit for your financial situation if you have one large expense to pay for (like a medical bill).
» MORE: Reverse mortgages: pros and cons
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