Proprietary Reverse Mortgage: Higher Limits for Expensive Homes
Need more than the $1,209,750 HECM limit? Learn how proprietary jumbo reverse mortgages work.
Key Takeaways
- 1Proprietary reverse mortgages are for homes exceeding the $1,209,750 HECM limit (2026)
- 2Offered by private lenders, not FHA-insured like HECMs
- 3Can access more equity in high-value homes
- 4Higher costs and stricter qualification than HECMs
- 5No FHA insurance means different risks and fewer protections
What Is a Proprietary Reverse Mortgage?
A proprietary reverse mortgage (also called jumbo reverse mortgage) is a non-FHA reverse mortgage offered by private lenders for higher-value homes.
- **No FHA insurance**: Not government-backed like HECMs
- **Higher loan limits**: Access equity above $1.2M FHA limit
- **Private lenders**: Banks and specialty lenders offer these
- **Fewer lenders**: Only a handful of companies offer proprietary products
- **Similar mechanics**: Same reverse mortgage concept, different terms
2026 HECM Limit
The FHA HECM maximum claim amount is $1,209,750 in 2026. If your home is worth more, you can only borrow against $1,209,750 with a HECM. Proprietary reverse mortgages allow accessing equity beyond this limit.
HECM vs Proprietary Reverse Mortgage
Compare the government-backed HECM with private proprietary products.
| Feature | HECM (FHA) | Proprietary (Jumbo) |
|---|---|---|
| Maximum home value | $1,209,750 (2026) | $2M - $10M+ depending on lender |
| FHA insurance | Yes (2% upfront + 0.5%/year) | No FHA insurance |
| Non-recourse protection | Yes - guaranteed | Usually yes, but verify |
| Origination fees | 2% of home value or $6,000 cap | Varies - often higher |
| Interest rates | Adjustable or fixed | Typically adjustable only |
| Counseling required | Yes - HUD-approved counselor | Optional but recommended |
| Availability | All 50 states | Limited states and lenders |
Verify Non-Recourse Terms
FHA HECMs are guaranteed non-recourse (heirs never owe more than home value). Proprietary loans usually have non-recourse terms, but read the fine print carefully - not all do.
How Proprietary Reverse Mortgages Work
Mechanics are similar to HECMs, but terms vary by lender.
- **Age 60-62 minimum**: Some proprietary lenders allow younger borrowers than HECM's 62
- **Higher principal limits**: Access more equity based on full home value, not just $1.2M
- **Lump sum or line of credit**: Choose payout method
- **Interest accrues**: Like HECM, balance grows over time
- **Repayment when you leave**: Sell home or heirs refinance/pay off
Proprietary Example
Your home is worth $2.5M. HECM limits you to $1,209,750 lending limit = ~$600k proceeds. Proprietary reverse mortgage can lend against the full $2.5M value = ~$1.2M+ proceeds (depending on age and rate).
Exploring your retirement options?
Our 60-second quiz matches you with the right account type
Qualification Requirements
Proprietary reverse mortgages often have stricter qualification than HECMs.
- **Age**: Usually 60-62+ (varies by lender)
- **Home value**: Typically $1M+ (lender minimums)
- **Property type**: Primary residence, some allow condos/co-ops
- **Credit score**: Many require 680+ (HECMs more lenient)
- **Financial assessment**: Verify ability to pay property taxes, insurance, HOA
- **Property maintenance**: Home must be in good condition
| Requirement | HECM | Proprietary |
|---|---|---|
| Age | 62+ | 60-62+ (lender specific) |
| Home value minimum | None | Usually $1M+ |
| Credit score | No minimum | Often 680+ |
| Counseling | Required | Recommended but not required |
| Property types | Most primary residences | More restrictive |
When to Consider a Proprietary Reverse Mortgage
Proprietary products make sense only in specific high-value home situations.
- **Home value > $1.5M**: Below this, HECM may provide sufficient proceeds
- **Need more equity access**: HECM lending limit too restrictive
- **Age 60-61**: Want reverse mortgage before HECM eligibility
- **Limited alternatives**: Don't want to sell or move
- **Strong credit**: Meet stricter lender requirements
- 1**Compare HECM first**: Always get a HECM quote before considering proprietary
- 2**Multiple proprietary quotes**: Limited lenders, compare all available
- 3**Calculate break-even**: Is extra cost worth extra proceeds?
- 4**Evaluate alternatives**: HELOC, home equity loan, downsizing, family loans
- 5**Review terms carefully**: Non-recourse guarantee, rate caps, fees
- 6**Consider tax implications**: Reverse mortgage proceeds aren't taxable, but interest isn't deductible
Niche Product Alert
Only a handful of lenders offer proprietary reverse mortgages (Finance of America, Longbridge, AAG). Market is much smaller than HECM. Shop carefully and compare terms.
Gold IRA: Tap Retirement Savings Instead of Home Equity
Before taking a complex proprietary reverse mortgage, consider whether a strategic Gold IRA distribution provides needed funds with more flexibility.
- Gold IRA distributions avoid putting a lien on your home
- No origination fees, closing costs, or ongoing insurance premiums
- Gold has appreciated historically - selling high may be strategic
- Leave home equity untapped for true emergencies or legacy
- Gold IRA + HELOC offers more flexibility than reverse mortgage
- Augusta Precious Metals can explain distribution strategies vs. reverse mortgage complications
Frequently Asked Questions
1Are proprietary reverse mortgages more expensive than HECMs?
Often yes. Without FHA insurance, lenders price in more risk. Origination fees may be higher, and interest rates can be less favorable. However, the higher principal limit may justify the cost if you need significant proceeds.
2Can I get a proprietary reverse mortgage on a $800k home?
Probably not. Most proprietary lenders set minimum home values at $1M+. Below that, HECM is the appropriate product.
3What happens if the lender goes out of business?
Unlike HECMs (backed by FHA), proprietary reverse mortgages depend on the lender's stability. Most are sold to investors who service them. Verify the loan is non-recourse and terms don't change if servicing is transferred.
4Can I refinance a proprietary reverse mortgage to a HECM later?
Generally no - you can't refinance from proprietary to HECM because the HECM lending limit is lower. You could refinance from HECM to proprietary (to access more equity as home appreciates), but not the reverse.
Related Articles
Helpful Guides
Interactive Tools
Ready to Protect Your Retirement?
Join thousands of Americans who have secured their savings with physical gold. Augusta Precious Metals makes the process simple.