Understanding Reverse Mortgages

A reverse mortgage is a unique type of loan created for homeowners 62 and older that allows you to access a portion of your home’s equity without having to make monthly mortgage payments. Rather than sending a payment to the lender each month, the loan gives you access to funds — through a lump sum, monthly deposits, a line of credit, or a blend of these options.


The benefit of this program is that you remain the homeowner. You can continue living in your home for as long as it’s your primary residence and you stay current on property taxes, homeowner’s insurance, HOA dues (if any), and basic maintenance.


For many kupuna in Hawaii, a reverse mortgage can help ease financial stress, create more room in the monthly budget, and offer greater stability in retirement. It’s a way to turn the equity you’ve worked hard to build into a source of comfort and flexibility — without leaving the home and community you love.

What is a HECM?

The most common type of reverse mortgage — backed by the FHA.


A Home Equity Conversion Mortgage (HECM) is the most widely used reverse mortgage program in the country.


Because it is insured by the Federal Housing Administration (FHA), borrowers receive the added benefit of strong federal protections and formal guidelines designed to keep the program safe and transparent.


HECMs offer several ways to receive your funds, including:

  • A lump sum
  • Monthly payments
  • A line of credit (which can grow over time)
  • Or a combination of these options


HECMs also require independent counseling, so every borrower gets a clear, unbiased explanation of how the program works before making any decisions.


If your home value falls within FHA lending limits and you prefer a government-insured option with long-standing safeguards, a HECM may be the right fit.

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What is a

Proprietary Reverse Mortgage and

How is it Different from a HECM?

A Proprietary Reverse Mortgage is designed for homeowners whose properties exceed FHA loan limits — which is common in Hawaii, where home values are often higher than the national average. These types of reverse mortgages also may work in certain scenarios for which a HECM is not possible.


Unlike a HECM, Jumbo reverse mortgages are offered by private lenders and are not insured by the FHA.

Here’s how they differ:

Key Advantages of Proprietary Reverse Mortgages


  • Higher Lending Amounts - Ideal for luxury or high-value homes, allowing you to access more equity.
  • No FHA Mortgage Insurance - Because the loans are privately funded, there is no FHA mortgage insurance premium.
  • Flexible Age Requirements - Some lenders allow borrowers as young as 55 to qualify (compared to age 62 for HECMs).
  • Limited Payout Options – Proprietary reverse mortgages typically offer lump-sum payouts, with fewer options for lines of credit or monthly payments.


For homeowners with high-value properties looking for fewer restrictions and more borrowing power, a proprietary reverse mortgage can be an excellent solution.

Who Qualifies for a Reverse Mortgage?

Qualifying is often simpler than people expect. To be eligible, you must:


  • Be at least 62 years old (Some private programs allow for 55+ — ask Wendy for details.)
  • Live in the home as your primary residence
  • Either own the home outright or have significant equity
  • Be able to keep up with property taxes, homeowner’s insurance, HOA dues (if applicable), and basic home maintenance


Reverse mortgages do not require high credit scores or large incomes. Instead, the lender looks at your overall ability to meet the ongoing responsibilities of owning your home.


If you’re married, there are additional protections in place for your spouse — even if they’re under 62 — so both of you can feel confident about long-term housing stability.

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Reverse Mortgage Safeguards 

Reverse mortgages are designed with several built-in protections to help ensure seniors make informed choices and feel secure in their homes:


  • Mandatory Counseling – Before moving forward, every borrower must complete a session with an independent, HUD-approved counselor to fully understand how the loan works.
  • Non-Recourse Loan – You or your heirs will never owe more than the value of the home, even if the market declines.
  • You Keep Ownership – As long as you stay current on property taxes, insurance, and routine maintenance, the home remains yours.
  • Spouse Protections – If your spouse is a co-borrower or qualifies as an eligible non-borrowing spouse, they can continue living in the home even after you pass away.
  • Government Oversight – HECMs are federally insured and closely regulated to ensure transparency and borrower protection.


These safeguards are in place to provide peace of mind and help you make confident, informed decisions about your financial future.

Reverse mortgages are designed to give you additional financial resources—not take resources away. With the right guidance, this loan can be a powerful tool for a secure and comfortable retirement.

I'd be happy to speak with you and/or your loved one to see if a reverse mortgage might be a good option for you.