California Reverse Mortgage Programs

A reverse mortgage — formally a Home Equity Conversion Mortgage (HECM) when FHA-insured — is a mortgage program that may be available to eligible homeowners age 62 and older. Under a HECM, a portion of the home's equity may be converted into proceeds disbursed to the borrower; the loan is repaid when the home is sold, the borrower no longer occupies it as a primary residence, or the borrower passes away. Advanced Funding Solutions is a mortgage brokerage that works with HECM-approved wholesale lenders.

HECM Eligibility Generally

HECM eligibility generally requires that the youngest borrower on title be at least 62, that the home be the borrower's primary residence, and that the borrower meet HUD/FHA financial-assessment requirements. The amount of HECM proceeds available is determined by Principal Limit Factor (PLF) tables published by HUD, which factor in borrower age, current interest rates, and home value up to the applicable FHA HECM limit. Borrowers who prefer to preserve their first mortgage or access equity in a different structure sometimes cross-review HECM against a HELOC or fixed-rate home equity loan. Final eligibility, available proceeds, and program guidelines are determined by HUD/FHA and the funding lender during underwriting.

HUD-Required Counseling

HUD requires that every HECM borrower complete a counseling session with a HUD-approved housing counselor before a HECM application can be submitted. The counseling is intended to ensure that borrowers understand the loan terms, costs, alternatives, and ongoing borrower obligations before committing. Advanced Funding Solutions can provide a list of HUD-approved counselors; counseling fees and scheduling are handled by the counseling agency.

Borrower Obligations Under a HECM

HECM borrowers are responsible for property taxes, homeowner's insurance, and basic home maintenance, and must continue to occupy the home as their primary residence. Failure to meet these obligations may result in the loan becoming due and payable. Specific requirements are set by HUD/FHA and the funding lender.

HECM rates, points, mortgage insurance premiums (both upfront and annual), origination, and closing costs are set by HUD/FHA and the funding lender at the time of application. Rates change without notice and are disclosed in writing during the formal application process as required by state and federal law. Any rate or cost figures discussed before a complete application are illustrative only and are not a quote, rate lock, or commitment to lend.

Proprietary (Non-FHA) Jumbo Reverse Programs

Some funding lenders offer proprietary jumbo reverse-mortgage programs that are not FHA-insured. Eligibility, minimum age, maximum loan amount, pricing, and consumer protections differ from FHA HECM and are set by the funding lender. Borrowers whose home values exceed the FHA HECM limit sometimes review a proprietary jumbo reverse alongside an asset depletion program as an alternative documentation path for a traditional mortgage. Borrowers should review program differences carefully before selecting a structure.