What You Need to Know

Seniors younger than 62 living in higher-priced homes with significant equity may be able to tap up to $4 million with a jumbo reverse mortgage. The funds can be used to meet changing healthcare needs or to replace a regular mortgage with one that doesn’t require a monthly payment. While jumbo reverse mortgages have a lot in common with traditional reverse mortgages, the differences are worth knowing to make sure they’re a good fit for your financial plans.

What is a jumbo reverse mortgage?

A jumbo reverse mortgage is a program offered by private lenders that allows you to borrow more than the Federal Housing Administration’s (FHA’s) Home Equity Conversion Mortgage (HECM) loan limits. The “maximum claim amount” for 2022 for the HECM program is $970,800 for all parts of the country.

Any reverse mortgage amount above the FHA HECM loan limit would require a jumbo reverse mortgage. However, you still have to meet the basic reverse mortgage requirements which means:

• You must live in the home you’re financing as your primary residence
• You must have enough equity to cover your current loan balance and any cash you want
• You’ll need to prove you can pay your property taxes and insurance
• You must maintain your home