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Reverse mortgage guide
A proprietary reverse mortgage, often called a jumbo reverse mortgage, is a private loan from a lender instead of a HECM insured by FHA. Because it isn't capped by the HECM lending limit, it can let owners of higher-value homes access more of their equity. It also skips FHA's mortgage insurance, but rates are usually higher, and each program sets its own rules for age, condos, payouts, and protections. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. The only way to know which is better for you is to price a HECM and a jumbo side by side.
For a long time, if you owned a home worth well above the HECM lending limit, a reverse mortgage was a strange deal. The HECM math simply stops counting your home's value at the limit. Whether your house was worth a little over the limit or three times the limit, you got roughly the same amount.
Proprietary reverse mortgages were built for exactly that situation. Most people call them jumbo reverse mortgages. They're private loans, not part of the FHA program, and on the right home they can make a big difference.
I'll be honest up front, though. "Jumbo" doesn't mean "better." On a lot of homes, a HECM still wins. This page explains how proprietary programs work, how they differ from a HECM, who they tend to fit, and how I compare the two for you.
In most ways, a proprietary reverse mortgage works like a HECM:
The difference is who stands behind the loan and who writes the rules. A HECM is insured by FHA and follows HUD's regulations. A proprietary reverse mortgage is the lender's own program, so the lender decides who qualifies, how much you can borrow, how you receive the money, and what protections come with it. That's why I always read each program's terms in writing before I recommend it.
On a HECM, the amount available is based on your age, the expected rate, and your home's value up to the national lending limit. You can see the current limit on Lending Limits. Anything above that limit doesn't count.
A proprietary program uses its own maximum loan amount and its own lending percentages by age. On a home worth well above the HECM limit, that can mean considerably more money available. On a home near or below the limit, the HECM often gives as much or more.
A HECM charges FHA mortgage insurance: an upfront premium at closing and an annual premium added to your balance. You can see how those work on Reverse Mortgage Costs.
Proprietary programs don't charge FHA mortgage insurance at all, because they aren't FHA-insured. On an expensive home, skipping the upfront premium can be a meaningful savings.
There's no free lunch, though. Without FHA insurance behind the loan, lenders generally charge a higher rate on a proprietary loan. A higher rate means your balance grows faster. See today's reverse mortgage rates.
So you're often trading lower upfront costs for a higher ongoing rate. Which one costs less depends on how much you borrow and how long you keep the loan.
HUD caps the origination fee on a HECM. That cap doesn't apply to proprietary loans, so each lender prices its own. Other closing costs, like title, appraisal, and recording, are similar to any reverse mortgage. I'll show you every fee, for both options, before you decide.
Every HECM borrower must be at least 62. Some proprietary programs accept younger borrowers in some states. State law and program rules matter here. In Texas, HomeSafe Standard requires borrowers to be 62, and the Texas Constitution requires the borrower or the borrower's spouse to be at least 62. Finance of America's HomeSafe Standard requires borrowers in Washington to be at least 60.
A HECM on a condo generally requires FHA approval for the project or the individual unit. Some proprietary programs accept condos that aren't FHA-approved, after their own review. In Florida, for example, we can do condos that aren't FHA-approved with proprietary programs. If your condo was turned down for a HECM, a jumbo may still be an option.
Manufactured homes are the other way around. The proprietary programs we offer don't accept them, so for a manufactured home, the HECM is the path. See Can I do a reverse mortgage on a manufactured home that has a stick built addition?
A HECM with an adjustable rate gives you the most choices: a line of credit, monthly payments (for a set term, or for as long as you live in the home and meet the loan terms), a lump sum, or a mix.
Proprietary programs tend to offer fewer choices. Many are a fixed-rate lump sum. Some offer an adjustable line of credit. Some pay part upfront and the rest over a set number of years. A few let you keep your existing first mortgage and add the reverse mortgage as a second lien.
On a HECM, HUD generally limits how much you can take in the first year, unless you need more to pay off your mortgage and other required costs at closing. Proprietary programs set their own draw rules, and some let you take more upfront. That can help if you're paying off a large mortgage. It can also make it easier to spend your equity too fast, so I'd go carefully.
On an adjustable HECM, the unused part of your line of credit grows over time, and the lender can't freeze or reduce it as long as you meet the loan terms. That's one of the best features in the HECM program.
Not every proprietary line of credit works that way. Some don't grow, and some have a limited draw period. And in Washington, proprietary programs don't offer a line of credit at all. If you want a standby line of credit for the long haul, read the standby line of credit strategy and ask how each program's line behaves.
A HECM is a non-recourse loan. If the home sells for less than the balance, you and your heirs don't pay the difference, because FHA insurance covers it.
The jumbo programs we offer are non-recourse: you and your heirs won't owe more than the home's value when it's sold, even if the balance is higher. That protection comes from the loan contract, not FHA insurance, so we review each product's documents with you.
A HECM protects an eligible non-borrowing spouse, and that spouse's age is used in the math. See the Non-Borrowing Spouse guide.
Proprietary programs handle spouses their own way. Some allow a younger spouse to be a full borrower because the program's minimum age is lower. Some allow a non-borrowing spouse with their own conditions. Some programs don't offer the same protections, such as a deferral period for a spouse who isn't on the loan. If you're married and one of you is younger, this point alone can decide which loan fits.
Counseling is generally required before a proprietary reverse mortgage too, and some lenders want it to cover their specific program. If your counseling didn't cover the program you choose, some lenders will ask you to do it again. Proprietary lenders also review your income and credit, and each program sets its own standards. See Reverse Mortgage Counseling and Reverse Mortgage Financial Assessment.
As a broker, we can compare proprietary programs from several lenders instead of just one. Today that includes:
Not every program is available in every state, and lenders change their features, ages, and limits from time to time. That's exactly why I run more than one side by side. Each one has its own sweet spot, and the right one for your neighbor may not be the right one for you.
Here's how the two usually stack up. Every program is different, so treat this as a starting point, not a final answer.
| Feature | HECM (FHA-insured) | Jumbo (proprietary) |
|---|---|---|
| Who backs it | FHA insurance, under HUD's rules | The lender's own program and rules |
| Minimum age | 62 for every borrower | Varies by program and state. HomeSafe Standard: 62 in Texas, 60 in Washington |
| How much home value counts | Up to the HECM lending limit | The program's own maximum, often well above the HECM limit |
| Mortgage insurance | Upfront and annual FHA premiums | Generally none |
| Interest rate | Generally lower | Generally higher |
| Ways to get your money | Lump sum, monthly payouts, line of credit, or a mix (adjustable rate) | Fewer choices, often a fixed-rate lump sum. No line of credit on proprietary programs in Washington |
| Line of credit growth | Unused line grows and can't be frozen while you meet the loan terms | Depends on the program |
| Condos | FHA project or single-unit approval needed | Some programs accept condos that aren't FHA-approved |
| Manufactured homes | Eligible when HUD's rules are met | Not accepted by the programs we offer |
| Non-recourse | Yes, backed by FHA insurance | Yes on the programs we offer, by contract rather than FHA insurance |
| Non-borrowing spouse protection | Set by HUD's rules | Set by each program |
| Monthly servicing fee | ZYNG doesn't charge one on HECMs | Some programs charge one |
In my experience, a proprietary loan is worth a serious look when:
When your home is near or above the HECM limit, here's what I do:
As a broker, I can compare programs from more than one lender instead of handing you one product and hoping it fits.
It's a proprietary reverse mortgage from a private lender, designed mainly for homes worth more than the HECM lending limit. It isn't insured by FHA and follows the lender's own rules.
Sometimes. It usually makes sense on homes worth well above the HECM limit, or when a HECM won't work for your condo or your age. On homes near or below the limit, a HECM is often better. I run both to find out.
They don't charge FHA mortgage insurance. Rates are usually higher instead.
In some states, some programs accept younger borrowers. In Texas, HomeSafe Standard requires borrowers to be 62, and the Texas Constitution requires the borrower or the borrower's spouse to be at least 62. Ask me what's available for your home.
On a HECM, no. On the jumbo programs we offer, also no. Their non-recourse protection comes from the loan contract rather than FHA insurance, so we review each product's documents with you.
Some programs allow it. If your next home is priced well above the HECM limit, ask me to compare a proprietary purchase with a HECM for Purchase.
Generally yes, and some lenders want it to cover their specific program. See Reverse Mortgage Counseling.
Each program is approved state by state. Finance of America's HomeSafe Standard, for example, is approved in all nine states where ZYNG is licensed. We work with Mutual of Omaha Secure Equity, Finance of America HomeSafe, Longbridge Platinum, Smartfi Choice, Nationwide Equities EquityPower, and MCM Holdings MCM Edge. Tell me where your home is, and I'll tell you which of them are available there.
Tell me about your home, your ages, and what you're trying to do. I'll price a HECM and every proprietary program available for your home, with the costs of each, so you can see the difference in dollars. Get My Estimate or call us at 530-888-6000.
More reading: How a Reverse Mortgage Works, Reverse Mortgage Pros and Cons, and Reverse Mortgages and Heirs.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
