Jumbo reverse mortgage: private loans above the HECM limit

A jumbo reverse mortgage is a private reverse mortgage for homeowners with higher-value homes. It is also called a proprietary reverse mortgage. It is not insured by the FHA, so it can count home value above the 2026 HECM limit of $1,249,125. The lender sets the rates, fees and rules, so compare offers carefully.

What is a jumbo reverse mortgage?

It is a reverse mortgage offered by a private lender instead of through the FHA's HECM program. The CFPB describes three kinds of reverse mortgages: FHA-insured HECMs, proprietary loans that are not FHA-insured, and single-purpose loans offered by some state and local governments. It says proprietary loans are "typically designed for borrowers with higher home values" (CFPB).

"Jumbo" is a marketing name, not a legal category. You'll see the same kind of loan called a proprietary, private or non-HECM reverse mortgage.

Most people who look at one own a home worth well above the HECM limit. The CFPB says proprietary loans are generally designed for borrowers with higher home values and more equity to borrow against (CFPB exam procedures, June 2020).

How does a jumbo reverse mortgage work?

You borrow against your home, and the loan is usually repaid only after you die, sell or move out. Like any reverse mortgage, it adds interest and fees to a balance that grows over time, which uses up equity.

Federal Truth in Lending rules define a reverse mortgage as a "nonrecourse" loan secured by your principal dwelling. It comes due when the borrower dies, the home is transferred, or the borrower stops living there as a principal dwelling, unless there is a default (12 CFR 1026.33(a)). As with a HECM, you still pay property taxes, homeowners insurance and upkeep. Falling behind can make the loan come due (see can you lose your home).

What is the difference between a HECM and a proprietary reverse mortgage?

The main difference is who stands behind the loan and who sets the rules. HECM rules come from HUD. A proprietary loan's terms come from the lender, within federal and state law.

The CFPB notes that many companies offering proprietary reverse mortgages copy HECM consumer protections, including mandatory counseling, but they aren't required to by the HECM rules (CFPB exam procedures, June 2020). Its guide for HECM borrowers adds that "non-HECM reverse mortgage loans may have different requirements and features" (CFPB).

What are the limits on a jumbo reverse mortgage?

There is no FHA limit, because the loan is not FHA-insured. Each lender sets how much of your home's value it will count. The $1,249,125 limit applies only to HECMs with FHA case numbers assigned Jan 1 through Dec 31, 2026 (HUD).

If your home is worth less than the HECM limit, a HECM usually counts all of its value already. Start with how much you can get from a HECM before shopping private loans.

What are the requirements for a jumbo reverse mortgage?

Each lender sets its own requirements, within federal and state law. Ask any lender for its rules in writing.

• Your home. Under federal rules, a reverse mortgage is secured by your principal dwelling (12 CFR 1026.33(a)). Utah law also requires the borrower to live in the home as a principal residence (Utah Code 57-28-202).
• Your age. A HECM requires 62. For a private loan, the lender sets the age within state law. Utah allows 55.
• Counseling. Many lenders require it, and Utah requires it by law (see state rules below).
• Ongoing costs. You must keep paying property taxes, homeowners insurance and upkeep.

For HECM rules, see our reverse mortgage requirements guide.

What are the costs and risks of a private reverse mortgage?

The lender sets its own interest rate and fees, and your loan balance grows over time. Protections can also differ from a HECM's, so read the contract closely.

• Rates and fees. There is no FHA mortgage insurance, but the lender sets its own interest rate and fees. Interest is added to the balance, so a higher rate makes the balance grow faster. Compare the total annual loan cost tables side by side.
• Different protections. HECM rules on repayment, heirs and an eligible non-borrowing spouse come from HUD (see what happens when the borrower dies). A private loan's rules are in its contract, so read them.
• Non-recourse terms. Federal Truth in Lending rules define a reverse mortgage as a "nonrecourse" loan that comes due when the borrower dies, sells or moves out (12 CFR 1026.33(a)). Ask the lender to show you, in the loan documents, that neither you nor your heirs will owe more than the home is worth.
• Your ongoing obligations. As with a HECM, you still pay property taxes, homeowners insurance and upkeep. Falling behind can make the loan come due (see can you lose your home).

What state rules apply in Utah, Washington and nearby states?

Utah and Washington have rules written for proprietary reverse mortgages. We have not found similar rules in the other seven states we cover.

• Utah. Utah law sets the minimum age at 62 for a HECM and 55 for a proprietary loan that is not FHA-insured, and the borrower must live in the home as a principal residence (Utah Code 57-28-202). For a proprietary loan, you must meet with an independent housing counselor before you sign the application (Utah Code 57-28-204).
• Washington. A lender must get approval from the state Department of Financial Institutions before offering or making a proprietary reverse mortgage, and must submit any product changes for approval (Washington DFI). You can ask a lender to confirm its product was approved.
• Idaho, Nevada, Oregon, Montana, Wyoming, Colorado and Arizona. We have not found a state rule written only for proprietary reverse mortgages in these states as of Oct 30, 2026. Federal Truth in Lending rules still apply, and your state's mortgage regulator can confirm whether a lender is licensed.

What should I ask a lender before I apply?

Ask if the loan is FHA-insured, what it costs in total, and whether it is non-recourse for you and your heirs. Get the answers in writing.

• Is this loan FHA-insured, or is it a proprietary loan?
• How much of my home's value does it count, and what is the interest rate and how can it change?
• What are all the upfront and ongoing fees? Ask to see the total annual loan cost table required by 12 CFR 1026.33.
• Is the loan non-recourse for me and my heirs, and where does it say so?
• What happens if my spouse isn't on the loan?
• Do you require counseling, and can I compare this offer with a HECM quote?

Federal rules also require the lender's disclosures to tell you that you don't have to go through with the loan just because you got the disclosures or signed an application (12 CFR 1026.33(b)(1)). An independent HUD-approved counselor can help you compare a HECM with a private loan before you decide.

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