HECM vs Proprietary Reverse Mortgage: Which Gets You More Cash in 2026?

Two Types of Reverse Mortgages

Most people think of the HECM when they hear "reverse mortgage." And for good reason: the Home Equity Conversion Mortgage has been the dominant product since the program launched in 1988. It is insured by the FHA, regulated by HUD, and available through thousands of lenders.

But there is a second category that has been growing rapidly: proprietary reverse mortgages. These are private loans created by individual lenders, not backed by the government. The two most prominent proprietary products in 2026 are:

• Finance of America HomeSafe — Available for homes valued up to $4 million, with borrowers as young as 55 in select states.
• Longbridge Platinum — Designed for high-value properties with competitive rates and flexible disbursement options.

Both product types convert home equity into tax-free cash with no monthly mortgage payments. The differences are in the details, and those details matter.

Side-by-Side Comparison

Lending Limits and Home Value

The 2026 HECM lending limit is $1,249,125. This means the FHA treats any home value above that threshold as if it were worth exactly $1,249,125 for the purpose of calculating your proceeds.

Proprietary products have no such government-imposed cap. Depending on the lender, they can accommodate homes worth $2 million, $3 million, or even $4 million and above.

Here is how the math plays out for different home values:

Notice that the HECM estimate plateaus at $600,825 for the $1.8M and $2.5M homes because of the lending limit. The proprietary product continues to scale with home value.

Costs and Fees

One area where proprietary products often have an advantage is cost structure:

• FHA Mortgage Insurance (HECM only): 2% of the appraised value (up to $1,249,125) at closing, plus 0.5% annually on the outstanding balance. On a $1M home, that is $20,000 upfront plus ongoing annual charges.
• Origination Fee: Both HECM and proprietary lenders charge origination fees, though HECM fees are capped by HUD ($6,000 maximum).
• Closing Costs: Appraisal, title insurance, recording fees, and other third-party costs apply to both products and are typically similar.
• Interest Rates: HECM rates are often slightly lower than proprietary rates, though the gap has narrowed in recent years.

When HECM Wins

The HECM is typically the better choice when:

• Your home is worth under $1 million. The HECM generally offers a higher loan-to-value ratio at lower home values.
• You want a growing line of credit. The HECM line of credit has a unique growth feature that increases available funds over time, regardless of home value changes. No proprietary product offers this.
• You want monthly tenure payments. Guaranteed payments for life are a HECM-exclusive feature.
• You want FHA insurance protection. The non-recourse guarantee backed by the federal government provides an additional layer of security.
• You want flexibility. HECM borrowers can switch between disbursement options (lump sum, line of credit, monthly payments) after closing.

When Proprietary Wins

A proprietary reverse mortgage is likely the better option when:

• Your home is worth over $1.3 million. You will likely access significantly more cash than with a HECM.
• You are between 55 and 61. If you are not yet 62, a proprietary product is your only reverse mortgage option.
• You want to avoid FHA insurance costs. Eliminating the 2% upfront MIP and 0.5% annual MIP saves substantial money on high-value homes.
• You need maximum upfront cash. Proprietary products are designed for lump-sum disbursement, which is ideal for paying off a large existing mortgage or funding a major expense.
• You own a condo that is not FHA-approved. Some proprietary products accept condominiums that do not meet FHA approval requirements.

Why Proprietary Reverse Mortgages Are Growing

Proprietary reverse mortgage volume has grown significantly in recent years. Several factors are driving this trend:

• Rising home values: As more homes exceed the HECM lending limit, more homeowners need products that can accommodate higher values.
• Higher interest rates: When rates are elevated, HECM Principal Limit Factors decrease, reducing available proceeds. Proprietary products can be more competitive in high-rate environments because they structure their calculations differently.
• Product innovation: Lenders like Finance of America and Longbridge have improved their proprietary offerings with better rates, more flexible terms, and lower age minimums.
• Baby Boomer demographics: The wealthiest generation of homeowners in history is reaching retirement age, and many have homes worth well above the HECM limit.

How to Decide

The right choice depends on your specific circumstances. Here is a simple framework:

1. Start with your home value. If it is under $800,000, the HECM is almost always the right call. If it is over $1.5 million, proprietary deserves serious consideration.
2. Consider your age. Under 62? Proprietary is your only option. Over 62? You have both to choose from.
3. Think about disbursement needs. Need flexible access over time? HECM line of credit. Need maximum cash now? Proprietary lump sum.
4. Get both quotes. The best way to decide is to see actual numbers for your situation. Our specialists can provide side-by-side comparisons of both products.

Take our 60-second quiz to get a personalized estimate. We will show you which product type is likely to deliver more proceeds based on your age, home value, and location.