Are There Different Types of Reverse Mortgages?

One of the first steps when choosing a reverse mortgage is to determine which type is best for your financial position and goals. 

Reverse mortgages — or home loans that help older people tap the equity they’ve built from their homes for cash — come in three main forms: home equity conversion mortgages (HECMs), proprietary jumbo loan reverse mortgages and single-purpose reverse mortgages. 

All three have one key thing in common: Borrowers don’t owe any kind of repayment until they stop living in the house full-time, fail to keep up with home insurance or property taxes, sell the house or die. Then, the entire sum, plus interest, is due. 

Below, CNBC Select explains the difference between the options and how to determine which is right for you. Plus, we spotlight our favorite lenders.

HECMs — the most popular type of reverse mortgage — are backed by the U.S. Federal Housing Administration. 

For that reason, these loans have federal requirements that proprietary jumbo mortgages don’t. For starters, borrowers must complete housing counseling with a U.S. Department of Housing and Urban Development (HUD)-approved counselor before they take out a HECM.  

Borrowers must also be 62 years or older. Additionally, in 2026, the maximum amount a borrower can take out with an HECM loan is between $543,287 and $1,249,125, depending on the area where the house is located. That’s lower than the $4 million roof that most jumbo reverse mortgages have. 

Unlike single-purpose reverse mortgages, HECMs can be used toward anything.  

Jumbo reverse mortgages are loans funded and backed entirely by a private financial institution instead of the government. 

Most lenders offer jumbo reverse mortgages up to $4 million — nearly four times the amount a borrower can get with an HECM. Plus, the minimum age is typically 55, which is lower than other types of reverse mortgages. 

Unlike a single-purpose reverse mortgage, you can use the funds for anything. 

Single-purpose reverse mortgages are the rarest form of reverse mortgages because they are not funded by traditional lenders. Instead, they are available from non-profits and local or state government. 

Like with a HECM, borrowers must be at least 62 years old. But unlike a HECM and a jumbo reverse mortgage, you can only use a single-purpose reverse mortgage for a specific purpose.

This type of reverse mortgage is typically easier to qualify for and tends to have lower rates and fees.

Here are CNBC Select’s top picks for reverse mortgage lenders. All offer a proprietary jumbo loan product and HECMs. 

Longbridge Financial 

If you’re seeking affordability, consider Longbridge. In addition to its low rates, it doesn’t charge a service fee, which is typically $35 per month. 

At CNBC Select, we like that Longbridge is available in all 50 states and that military service members and veterans can get a $500 discount on closing costs. 

Finance of America

If you’re looking for a stellar proprietary jumbo loan, we recommend Finance of America.

There are no origination fees or mortgage insurance premiums on its HomeSafe standard product, unlike every lender’s proprietary reverse mortgage. 

Mutual of Omaha

If you want to deal with your reverse mortgage in person, Mutual of Omaha is one of the only major reverse mortgage lenders with physical locations throughout the country. 

It also has high customer service ratings and is available in all states besides New York and West Virginia. 

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed financial decisions. Every reverse mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of the products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.