Home Equity Conversion Mortgage
Access More of Your Home’s Value—and Expand What’s Possible in Retirement
If you own a high-value home and are age 62 or older*, a jumbo reverse mortgage could be the key to unlocking more of your equity—giving you greater financial flexibility in retirement. Designed for homes typically valued over $1 million, jumbo reverse mortgages offer unique benefits that go beyond the limits of a traditional FHA-insured Home Equity Conversion Mortgage (HECM).
​
At Fairway, we’re dedicated to helping you find the right loan solution for your unique goals and lifestyle. Whether you’re planning ahead or ready to move forward, our team is here to guide you every step of the way.
​
*Some proprietary products may be available to homeowners as young as 55, depending on your state and lender guidelines.
What is a Jumbo Reverse Mortgage?
It is a home loan that allows older homeowners to access a portion of the equity they have in a high-value property and allows them to defer repayment to a later date.​
As a borrower, you have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all. Of course, you must still maintain the home and pay homeowners insurance and property taxes, just like a traditional mortgage. ​​
Key Advantages of a Jumbo Reverse Mortgage Loan (Over a HECM Loan)
Access more equity
Your age, the lending limits, the interest rate, and the appraised value of your home all factor into how much money you would be able to receive with a reverse mortgage. ​
With a traditional HECM reverse mortgage, the home value limit that can be borrowed against is currently capped at $1,209,750—whereas that limit on a jumbo reverse mortgage can extend into the millions of dollars. ​
For example, let’s say Harold owns a home that is worth $1.5 million. He may be able to borrow more funds with a jumbo reverse mortgage than a HECM reverse mortgage because the home value amount he is borrowing against is its full appraised value, not the $1,209,750 maximum he would face with a HECM reverse mortgage.​​
NOTE: Story is for illustration purposes only. The persons depicted herein are fictional and any resemblance to actual persons is a coincidence.
General Requirements:
-
You must be 62 years old or older
-
You must meet minimal credit and property requirements
-
You must receive reverse mortgage counseling from a HUD approved counseling agency
-
You must not be delinquent on any federal debt
-
Home must be a primary residence
-
Property must be a single-family home, a 2- to 4-unit dwelling, or FHA-approved condo
Avoid paying a mortgage insurance premium (MIP)
Jumbo reverse mortgages often have no mortgage insurance premium (MIP), which can reduce the overall loan costs. ​
With a HECM reverse mortgage, the FHA requires that the borrower pays both an initial and ongoing mortgage insurance premium (MIP), which helps make it a non-recourse loan. A non-recourse loan means if the balance on the loan exceeds the home value at the time the home is sold, neither you nor your heirs will be responsible for paying the deficit. This feature on a HECM reverse mortgage loan is guaranteed by the FHA.​
While most jumbo reverse mortgages are non-recourse loans, no jumbo reverse mortgages loans are insured by the FHA.
Less restrictive qualifications for condos
Unlike a HECM reverse mortgage, with a jumbo reverse mortgage, condos do not necessarily have to be FHA-approved.
DID YOU KNOW? A jumbo reverse mortgage can also be used to finance the purchase of a new home.
-
What is the interest rate on a HECM loan?Reverse mortgage interest rates can vary by lender and whether you select a fixed or variable product. The variable interest rate is composed of two parts: an index and a lender margin (both are stated in the mortgage contract). Fairway uses the weekly average of the Constant Maturity Treasury (CMT) as the index. To find out what the current reverse mortgage interest rates are, please reach out to Fairway retirement mortgage specialist.
-
What is the interest rate on a HECM loan?Reverse mortgage interest rates can vary by lender and whether you select a fixed or variable product. The variable interest rate is composed of two parts: an index and a lender margin (both are stated in the mortgage contract). Fairway uses the weekly average of the Constant Maturity Treasury (CMT) as the index. To find out what the current reverse mortgage interest rates are, please reach out to Fairway retirement mortgage specialist.
-
Who qualifies for a HECM?To qualify for a Home Equity Conversion Mortgage (HECM), you must: Be 62 or older Own your own home (must be an eligible property type) and reside in it as your primary residence Own the home outright or have significant equity in the home Meet minimal income and credit requirements Attend a financial counseling session
-
What are the pros and cons of a HECM?The pros of a Home Equity Conversion Mortgage (HECM): You can convert a portion of your home’s equity into cash, fixed monthly advances, or a growing line of credit (growth applies to the unused funds). You are not obligated to make a monthly mortgage payment — although you can — for as long as you meet the loan terms. Those terms include living in the home as your primary residence and paying the property-related taxes, insurance, and upkeep expenses. The cons of a HECM: The unpaid reverse mortgage loan balance grows over time. This is because interest and fees get tacked on the unpaid loan balance. Note: You do have the option to pay down the loan balance at any time — you can pay as much or as little toward it as you would like. You are drawing down on your home equity. Naturally, that likely means your heirs would have less money (or no money at all) coming to them from that particular asset.
-
Is a HECM a second mortgage?No. A Home Equity Conversion Mortgage (or HECM, commonly called a reverse mortgage) must be in the first lien position. The good news is the loan proceeds can be used at closing to pay off (refinance) an existing first or second mortgage as long as the lien(s) meets the seasoning guidelines (liens that have been in place longer than 12 months or resulted in less than $500 cash to the borrower. An exception now exists for some HELOCs).
-
How is a HECM repaid?When a maturity event occurs (e.g., the home is no longer the primary residence of the at least one borrower or a non-borrowing spouse), the loan becomes due and payable, and the home is typically sold to repay any outstanding loan balance. Because reverse mortgages are non-recourse loans, the sale of the home after loan maturity will always satisfy the loan repayment obligation — neither the borrower nor their heirs will be personally liable for any balance deficiency.
-
Can I buy a flipped home with a HECM for Purchase loan?The sales contract must be signed more than 90 days from the seller’s purchase of the property.
-
Is there a Mortgage Insurance Premium (MIP)?With a HECM for Purchase, you will be required to pay upfront and ongoing mortgage insurance premiums. These premiums are usually financed into the loan and not paid out of pocket – their purpose is to fund the non-recourse feature, which protects you or your heirs from being stuck with a bill if your loan balance is higher than what your home sells for when the loan matures and is due and payable.
-
I want to buy a new construction home — can I start the application before the home is completed?Yes. You can complete the HECM for Purchase application and begin the process of securing the loan, but the appraisal, and consequently the loan closing, cannot happen until the Certificate of Occupancy has been issued.
-
What source of funds (money) are allowed when you purchase a home with a HECM for Purchase loan?The money must come for your liquid assets (e.g., bank accounts, CDs, retirement accounts) or from the documented sale of other assets you may have (your present home for example).
-
Why is my down payment higher with an H4P loan compared to a conventional mortgage?Your down payment is higher initially because you will not be required to make monthly mortgage payments (except for property-related taxes and insurance). With a traditional mortgage, you could potentially lose more in cash flow over the years because of the consistently required payments.
Stay Informed! Join our mailing list to receive HECM Loan Insights delivered to your inbox
Stay informed and take control of your financial future by joining our mailing list! As a subscriber, you’ll receive expert insights, updates on Home Equity Conversion Mortgage (HECM) loans, and helpful resources delivered straight to your inbox. Whether you’re exploring options or ready to take the next step, our curated content will keep you informed and empowered. Sign up today and stay connected with the latest tools and information to support your retirement goals!
Complaints may be directed to: (877) 699-0353 or Email us: customerservice@fairwaymc.com. | Private Policy | Terms of Use | Legal Disclosures Licensing | NMLS Consumer Access
​
Copyright©2025 Fairway Independent Mortgage Corporation (“Fairway”) NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. The youngest borrower must be at least 62 years old. Monthly reverse mortgage advances may affect eligibility for some other programs. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.