Proprietary Reverse Mortgages
A proprietary reverse mortgage is a private reverse mortgage program that is not the FHA-insured HECM program, so costs, protections, eligibility, proceeds, and servicing rules must be compared carefully.
Before you decide
- Private reverse mortgage programs are not the same as FHA-insured HECMs.
- Higher-value homes may create a reason to compare proprietary options.
- The borrower should compare protections, costs, proceeds, and exit rules before choosing.
How Proprietary Reverse Mortgages Fit
Proprietary reverse mortgages are private programs. They can be useful in some cases, especially when a homeowner has a higher-value property or a situation that does not fit the HECM structure.
What To Compare
Compare the payment options, costs, available proceeds, counseling expectations, non-borrowing spouse treatment, servicing rules, default triggers, and how the loan is resolved later.
A Better Way To Compare
Many borrowers hear “reverse mortgage” and think only of HECM. A better comparison starts with the FHA-insured HECM page, then reviews whether a private program adds value or creates unacceptable tradeoffs.
Common Questions
Can a reverse mortgage pay off my existing mortgage?
A reverse mortgage may pay off an existing mortgage at closing if the homeowner qualifies and available proceeds are sufficient after program calculations, liens, and costs.
Do I still own my home with a reverse mortgage?
The homeowner keeps title to the home, but the reverse mortgage is a loan secured by the property and the borrower must keep meeting loan obligations.
When should a homeowner avoid a reverse mortgage?
A reverse mortgage may not fit if the homeowner expects to move soon, cannot keep taxes and insurance current, cannot maintain the home, or has better alternatives after reviewing the full household plan.
Who This May Fit
- Homeowners whose property value or goals do not fit neatly inside the HECM structure.
- Homeowners comparing multiple reverse mortgage programs with family or advisors.
Who Should Be Careful
- Do not assume private program protections match FHA-insured HECM protections.
- Program availability and terms can change by lender and state.
Keep reading
A HECM is the FHA-insured reverse mortgage program for eligible homeowners and requires HUD-approved reverse mortgage counseling before closing.
Reverse Mortgage RequirementsReverse mortgage approval depends on age, living in the home, property type, equity, counseling, financial review, and the homeowner's ability to keep loan obligations current.
Reverse Mortgage CostsReverse mortgage costs can include origination, mortgage insurance for HECM loans, third-party closing costs, servicing-related costs, and interest according to the loan terms.
Reverse Mortgage vs HELOCA HELOC may fit borrowers who can qualify for and manage required payments, while a reverse mortgage may fit eligible older homeowners who need a different cash-flow structure and plan to remain in the home.
Where this information comes from
U.S. Department of Housing and Urban Development - official
https://www.hud.gov/program_offices/housing/sfh/hecmConsumer Financial Protection Bureau - regulator
https://www.consumerfinance.gov/consumer-tools/reverse-mortgages/Federal Trade Commission - regulator
https://consumer.ftc.gov/articles/reverse-mortgagesReviewed by Nick Cunningham, NMLS #907393. Last reviewed 2026-06-07.
Educational information only. Not personal financial, legal, tax, or benefits advice.