San Francisco Reverse Mortgages and Home Loans

If you own a home in San Francisco, you may have a math problem with reverse mortgages, and it's a nice problem to have: your home may be worth more than the HECM will count.

The HECM only uses your home's value up to a national limit. So for many homeowners here, the real question often isn't "can I get a reverse mortgage?" It's "which reverse mortgage gives me the most for the least?" Add California's property tax rules and its counseling wait, and there's a lot worth knowing before you start.

The short version

• We help with reverse mortgages and regular home loans for San Francisco homes, through loan officers licensed in California.
• HECM or jumbo? On many homes here, a proprietary (jumbo) reverse mortgage may give you access to more. I'll show you both.
• Prop 13 stays with you. A reverse mortgage doesn't change who owns the home.
• Moving? Prop 19 lets owners 55 and older carry their property tax base to a new California home, and a HECM for Purchase can help pay for it.
• California makes you wait 7 days after counseling before a reverse mortgage application is final.

Reverse mortgages for San Francisco homeowners

The HECM

The HECM is the FHA-insured reverse mortgage. You must be 62 or older, live in the home as your primary residence, and have enough equity. You can take a line of credit, monthly payments, a lump sum, or a mix.

There are no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.

Even on a high-value home, a HECM can make sense. Its line of credit can grow, it has federal protections, and it may offer more payment options. It just won't count value above the limit. See Lending Limits.

Proprietary (jumbo) reverse mortgages

A jumbo reverse mortgage comes from a private lender and uses its own, higher limits. It doesn't charge FHA mortgage insurance, which can save a lot upfront on an expensive home. Some programs also accept condos that aren't FHA-approved.

The tradeoff is usually a higher rate, and fewer ways to take the money. That's why I run a HECM and a jumbo side by side, with the same facts, so you can see the difference in black and white. See today's rates.

The HECM for Purchase

The HECM for Purchase lets you buy your next home with a down payment and a reverse mortgage together, with no required monthly mortgage payment afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. In California, it pairs especially well with Prop 19.

California property taxes: Prop 13 and Prop 19

Prop 13

Under Prop 13, your home's assessed value is set when you buy it and can generally rise by no more than 2 percent a year. If you've owned your San Francisco home for decades, your property tax bill may be a small fraction of what a new buyer would pay.

A reverse mortgage is a loan, not a sale. You keep the title, so it doesn't trigger a reassessment.

Prop 19 for owners 55 and older

Prop 19 changed the rules starting April 1, 2021. If you're 55 or older and sell your primary residence, you can transfer its taxable value to a replacement home anywhere in California:

• You can do it up to three times.
• You must buy or build the replacement within two years of selling the original.
• If the new home costs more than the old one sold for, the difference is added to the transferred value.
• You file with the county assessor where the new home is, generally within three years.

How Prop 19 and a HECM for Purchase work together

Here's the combination I like for the right person. Sell your San Francisco home, keep your low tax base with Prop 19, and use a HECM for Purchase to buy a home that fits the next stage of life, with no required monthly mortgage payment afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. Talk with the assessor and a tax professional about your situation. It's a conversation for your CPA too.

Property tax postponement or a reverse mortgage?

California's State Controller runs a Property Tax Postponement program that lets eligible older homeowners put off paying their property taxes. It sounds like a natural fit next to a reverse mortgage, but the two don't mix. The program doesn't accept a home that has a reverse mortgage on it, and if you're already in the program and take out a reverse mortgage, the postponed taxes come due.

So if you're weighing both, look at them side by side before you apply for either. Sometimes postponement is enough by itself. Sometimes a reverse mortgage does more, and the postponed balance simply gets paid off at closing. I'm glad to run both with you.

California's 7-day counseling wait

Before any HECM, you meet with an independent, HUD-approved counselor. California adds its own rule: a lender can't accept your final, complete reverse mortgage application, or charge you fees, until 7 days after counseling. So the 8th day is the earliest.

California law also says a lender can't require you to buy an annuity to get a reverse mortgage, and limits referrals for annuities and other financial products before closing. Read Why do I need to wait 7 days after counseling? and Reverse Mortgage Counseling.

Condos and insurance in San Francisco

Condos

For a HECM, a condo generally needs FHA project approval, or the unit may qualify through single-unit approval. Some jumbo programs don't require FHA approval. I'll check before you pay for an appraisal.

Insurance

With a reverse mortgage, you must keep homeowners insurance. If you can only get a California FAIR Plan policy, that's workable: the lenders we work with accept a FAIR Plan policy paired with a difference-in-conditions policy. Earthquake insurance generally isn't required for a HECM, but whether you want it is a separate, very San Francisco question. If you're in a condo, your HOA dues and any special assessments are part of what you must keep paying.

Home loans for San Francisco buyers and owners

We also help with:

• Buying a home and seeing your buying power before you shop.
• Refinancing.
• Home equity loans and HELOCs.
• Jumbo loans, conventional loans, and FHA loans.
• VA loans for eligible veterans and service members.

Request a rate quote for your numbers.

How we work with San Francisco clients

1. A conversation by phone or video. We'll compare HECM and jumbo for your home.
2. Counseling with an independent, HUD-approved counselor, then the 7-day wait.
3. Application and appraisal.
4. Signing usually at home with a mobile notary.

San Francisco resources

• San Francisco Department of Disability and Aging Services, Benefits and Resources Hub
• California State Board of Equalization: Prop 19
• HUD-approved housing counselors: hud.gov/counseling or (800) 569-4287

Common questions

My home is worth more than the HECM limit. Can I still get a HECM?

Yes. The limit only caps the value used in the math. A jumbo may give you access to more, and I'll show you both.

Will a reverse mortgage reassess my property taxes under Prop 13?

No. It's a loan, not a change in ownership.

Can I use Prop 19 and a HECM for Purchase together?

Often, yes, if you're 55 or older for Prop 19 and 62 or older for the HECM, and you meet each program's rules.

Why do I have to wait 7 days after counseling?

It's California law, meant to give you time to think without pressure.

Next step

Get My Estimate, find a loan officer for California, or call us at 530-888-6000. See our California page and the full guide to Reverse Mortgages.

Sources

• California State Controller, Property Tax Postponement FAQ: sco.ca.gov
• California State Board of Equalization, Introduction to Prop 19: boe.ca.gov
• California Civil Code section 1923.2: justia.com
• HUD Mortgagee Letter 2019-17, summarized by Hinshaw & Culbertson: hinshawlaw.com
• HUD, FHA Reverse Mortgage for Seniors (HECM): hud.gov