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What is a HECM Reverse Mortgage Loan?

A Home Equity Conversion Mortgage (HECM) is the FHA-insured reverse mortgage program designed for homeowners age 62 and older.  Unlike traditional mortgages, here you don’t make monthly mortgage payments. Instead, you will unlock part of your home’s equity as cash, all while keeping your name on the title and the right to live in your home.

Key Benefits of a HECM Reverse Mortgage

FHA-Backed Security

HECM is federally insured by the FHA, giving you peace of mind with strong, established protections built for homeowners like you.

No More Mortgage Payments

You can eliminate monthly principal and interest payments, freeing up cash for retirement. (You’ll still cover taxes, insurance, and upkeep.)

Cash Your Way

Choose the option that fits your life: a lump sum, steady monthly income, a line of credit, or a combination.

Family Protection Built In

Neither you nor your heirs will ever owe more than your home’s sale value, even if property prices fall.

Stay in the Home You Love

Keep your name on the title and continue living in your home while turning equity into practical financial freedom.

Common Uses of a Reverse Mortgage

  • Cover everyday expenses – Use your home equity to ease retirement living costs.
  • Pay off your mortgage – Eliminate that monthly payment and free up cash flow.
  • Handle medical needs – Fund healthcare, prescriptions, or in-home care without draining savings.
  • Renovate your home – Upgrade for safety, comfort, or accessibility as you age.
  • Support your family – Help children or grandchildren with education or a first home.

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Ways Loan Proceeds Can Be Taken

  • Lump Sum – Get one large payout for major expenses or debt payoff.
  • Monthly Payments – Add steady, predictable income to your retirement budget.
  • Line of Credit – Tap funds only when you need them; unused credit grows over time.
  • Combination – Mix payout methods to create a plan that fits your lifestyle.

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Who Can Qualify for a HECM?
  • You must be 62 or older
  • The home must be your primary residence
  • You should have significant equity (usually 50% or more) or own it outright
  • A HUD-approved counseling session is required before applying
What Types of Homes Qualify for HECM?
  • Single-family homes
  • 2–4 unit properties (if you live in one of the units)
  • FHA-approved condos
  • Manufactured homes that meet FHA standards
What Costs Should You Expect?
  • Origination fee: capped by FHA
  • Upfront mortgage insurance (MIP): 2% of home value (capped by FHA)
  • Annual MIP: 0.5% of loan balance
  • Other fees: appraisal, title, and standard closing costs

We believe in upfront transparency, with no hidden surprises.

How a HECM Works?

Counseling

Meet with a HUD-approved counselor to review obligations and benefits.


Application

Apply through TFG; eligibility and property requirements are reviewed.

Appraisal & Underwriting

Your home is appraised and loan terms structured.

Closing

 Finalize the loan and select your payout method.

After Closing

No monthly mortgage payments required; keep up with taxes, insurance, and maintenance.

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Frequently asked questions

Do I keep ownership of my home in HECM?

Yes. You stay on the title and remain the legal owner of your home. The reverse mortgage simply gives you access to your equity — it doesn’t take your house away.

What happens to my heirs?

What happens to my heirs?
When the loan becomes due, your family can decide:

  • Sell the home and use the proceeds to pay off the loan.
  • Refinance and keep the home.
  • Or walk away — thanks to “non-recourse” protection, they will never owe more than the home’s value.

How much can I borrow through HECM?

It depends on:

  • Your age (older borrowers qualify for more).
  • Your home’s appraised value.
  • Current interest rates.
  • FHA lending limits (maximum claim amount).
    A loan officer can give you a personalized estimate in minutes.

Is counseling required for a HECM?

Yes. HUD requires all borrowers to complete a counseling session with a HUD-approved counselor before applying. This ensures you fully understand the program, obligations, and benefits.

How is a HECM repaid?

Repayment happens when the last borrower (or eligible non-borrowing spouse) no longer lives in the home. At that time, the loan is paid off by selling the home, refinancing, or from the estate. Until then, no monthly mortgage payments are required (only taxes, insurance, and upkeep).

What is the interest rate on a HECM loan?

HECMs can have fixed or adjustable interest rates. The rate you receive depends on market conditions and lender offerings at the time you apply. Your loan officer will disclose current options.

How is HECM different from a traditional loan?

With a traditional mortgage, you make monthly payments and your balance goes down. With a HECM reverse mortgage, you don’t make monthly payments — your loan balance grows over time, and repayment happens later (when you sell, move out, or pass away).

What are the risks of a HECM loan?

A HECM is generally safe, but you should consider:

  • Your loan balance increases over time (since payments are deferred).
  • You must keep up with property taxes, insurance, and maintenance — otherwise the loan could default.
  • Home equity left to heirs may be reduced.
  • Fees and upfront costs can be higher than traditional loans.

Explore Our Other Reverse Mortgage Options

Not everyone is the perfect fit for a HECM. That’s why at Truss Financial Group we also offer:

Proprietary Reverse Mortgage
Ideal if your condo isn’t FHA-approved, if you’re younger than 62, or if you need higher lending limits.
Jumbo Reverse Mortgage
Designed for owners of luxury or high-value homes above FHA caps, unlocking larger loan amounts.

Whatever your situation, we’ll match you with the reverse mortgage that fits your retirement goals best.