A reverse mortgage in California lets a homeowner borrow against the home without a monthly mortgage payment. Today there are two kinds, the FHA-insured HECM and private loans such as HomeSafe, and picking the wrong one can leave hundreds of thousands of dollars of equity out of reach.
The choice comes down to your age, your home's value and your current mortgage. A 72-year-old in Palm Desert with a $640,000 home and a 66-year-old in Manhattan Beach with a $2.6 million home need different loans.
Bill Lewis at Choice One Mortgage has spent more than 30 years helping California homeowners use their equity in retirement. In this guide, we'll explain how both kinds work, what each costs, and walk through seven scenarios from the Coachella Valley, Ventura County and the South Bay that show when each loan makes the most sense.
Quick answer: Choose a HECM when you are 62 or older, your home is worth less than about $1.25 million, and you want the lowest rate, monthly payments for life, or an FHA-insured line of credit that grows. Choose a proprietary HomeSafe loan when the home is worth well over $1.25 million, you are between 55 and 61, your condo is not FHA-approved, or you want to keep a low-rate first mortgage with HomeSafe Second. Neither requires a monthly mortgage payment.
How a Reverse Mortgage Works
A reverse mortgage is a loan against your home with no required monthly payment. Interest and fees are added to the balance, and the loan is repaid when the last borrower sells, moves out for good, or passes away.
You still own the home. You must live in it as your primary residence, pay the property taxes, insurance and any HOA dues, and keep it in good repair. Miss those and the loan can become due.
Both kinds are non-recourse. If the balance ends up larger than the home is worth, neither you nor your heirs owe the difference. Your heirs can sell the home and keep whatever equity is left, or pay off the loan and keep the home.
HECM and HomeSafe: The Two Families of Reverse Mortgages
The HECM reverse mortgage (Home Equity Conversion Mortgage) is insured by FHA, and you pay FHA mortgage insurance for that guarantee.
A proprietary reverse mortgage is designed and backed by a private lender. We arrange these through the HomeSafe program, which has three main versions.
| HECM | HomeSafe Standard | HomeSafe Select | HomeSafe Second | |
|---|---|---|---|---|
| Minimum age | 62 | 55 in California | 55 in California | 55 in California |
| Loan amounts | Home value counted up to $1,249,125 | Up to $4 million | Up to $4 million | About $50,000 to $1 million |
| How you get the money | Lump sum, line of credit, monthly payments, or a mix | Lump sum at closing | Line of credit | Lump sum or draws over time |
| Interest rate | Fixed (lump sum only) or adjustable | Fixed | Adjustable | Fixed |
| Your current mortgage | Paid off at closing | Paid off at closing | Paid off at closing | Stays in place |
| FHA mortgage insurance | 2% upfront, 0.5% a year | None | None | None |
The 2026 limit of $1,249,125 is set by HUD and applies everywhere in the country. It is the most home value a HECM will count, so a $3 million home is treated as a $1,249,125 home.
How Much You Can Borrow
A HECM lends a percentage of the home's value, up to the limit. HUD sets the percentage by the age of the youngest borrower and the interest rate. Older borrowers and lower rates get more. At recent rates a 70-year-old can expect roughly 40%.
HomeSafe percentages are not published and are often lower than a HECM's, but they apply to much more of the home's value. Here is the effect for a borrower in their late 60s.
| Home Value | HECM Counts | HECM at 38% | HomeSafe at 30% of Full Value | Larger Loan |
|---|---|---|---|---|
| $800,000 | $800,000 | $304,000 | $240,000 | HECM by $64,000 |
| $1,250,000 | $1,249,125 | $474,668 | $375,000 | HECM by $99,668 |
| $2,600,000 | $1,249,125 | $474,668 | $780,000 | HomeSafe by $305,332 |
Figures are examples only. The percentages are illustrative, not quotes. Your actual amount depends on your age, the interest rate on the day you lock, and the appraised value, and closing costs come out of it.
Below about $1.25 million the HECM usually lends more. Above about $1.6 million, HomeSafe usually does. In between, it depends on age and rates, which is why we run both.
Scenarios Where a HECM Makes the Most Sense
Palm Desert: Pay Off the Mortgage and Keep a Growing Line of Credit
Linda is 72 and widowed. Her Palm Desert home is worth $640,000 and she owes $95,000 on a loan with an $885 monthly payment. Her Social Security covers her bills, but only just.
An adjustable-rate HECM with an illustrative principal limit of 42% gives her $268,800. The payoff, the $12,800 upfront FHA premium, a $6,000 origination fee and about $4,000 of other closing costs use $117,800. Her $885 payment is gone, and the remaining $151,000 sits in a line of credit she can draw on when she needs it.
The unused part of a HECM line grows at the same rate as the loan balance, about 7.25% a year at a 6.75% example rate plus the 0.5% annual premium. If Linda left $150,000 untouched for ten years it would grow to about $309,000 of available credit. No HomeSafe loan offers that FHA-backed guarantee, and at her home's value the HECM also lends more.
Ventura: Monthly Income for Life
Robert is 79 and Ann is 77. Their Ventura home is paid off and worth $780,000, and they want a steady check for in-home help. An adjustable-rate HECM can pay them a set amount every month for as long as one of them lives in the home. HomeSafe loans do not offer monthly payouts.
Buying a Smaller Home
A HECM for Purchase lets you buy a home with a large down payment and a reverse mortgage for the rest, with no monthly mortgage payment afterward. If you are 55 or older and selling a California home, pair it with the Prop 19 property tax transfer so you keep your low tax base as well. Downsizing after 55 with Prop 19 and a reverse mortgage for purchase walks through the numbers.
Scenarios Where a HomeSafe Loan Makes the Most Sense
Manhattan Beach: A Home Worth Far More Than the HECM Limit (HomeSafe Standard)
Mark and Susan are 68 and 66. Their Manhattan Beach home is worth $2.6 million. They owe $650,000 on a 2023 loan at 6.25% with a $4,310 monthly payment, and they would like that payment gone before they both retire.
A HECM counts only $1,249,125 of the value. At an illustrative 38% that is about $474,668, which is not enough to pay off $650,000. The HECM does not work at all. HomeSafe Standard lends against the full $2.6 million. At an illustrative 30% that is $780,000, enough to pay off the loan, remove the $4,310 payment and leave about $130,000 before closing costs.
Rancho Mirage: A Standby Line of Credit on a Paid-Off Home (HomeSafe Select)
Carol is 63, recently retired and debt-free in a $1.9 million Rancho Mirage home. She does not need cash today, but she wants money available for health costs or a bad year in the stock market without selling investments at the wrong time.
A HECM line counts $1,249,125 of her value, about $424,703 at an illustrative 34% for her age. HomeSafe Select counts all $1.9 million, about $570,000 at an illustrative 30%, as a line of credit she draws on only when she needs it. With nothing borrowed, nothing accrues.
Thousand Oaks: Keep a 2.75% First Mortgage (HomeSafe Second)
Dave is 60 and Maria is 58. They owe $380,000 on a 2.75% loan with a $1,837 payment, their home is worth $1.2 million, and they want $150,000 to help their daughter buy her first home. Maria is under 62, so a HECM is not an option yet, and it would pay off their 2.75% loan anyway.
A cash-out refinance to $530,000 at an example 6.5% would raise their payment to about $3,350, or $1,513 more a month. A HELOC would add roughly $1,063 a month in interest at 8.5%. HomeSafe Second leaves the 2.75% loan alone and adds no new required payment. The cost is growth: $150,000 at an example 9.5% becomes about $240,751 in five years and $386,408 in ten. Our reverse second mortgage guide covers this option in detail.
La Quinta: Retiring at 57
Tom is 57 and retiring early from a career in Los Angeles. His La Quinta home is worth $950,000 and he owes $310,000 at 7.125%, with a $2,425 payment that would eat a third of his pension. He cannot get a HECM for five more years. HomeSafe Standard can pay off the loan now and remove the payment while he waits for Social Security.
Palm Springs: A Condo That Is Not FHA-Approved
Many Palm Springs condo complexes are not on FHA's approved list because of rentals, budgets or litigation, which rules out a HECM. HomeSafe reviews the condo under its own guidelines, so owners there can often still get a reverse mortgage.
Which Loan Fits: Scenario Summary
| Situation | Usually the Best Fit | Why |
|---|---|---|
| 62+, home under $1.25 million, wants a credit line | HECM | Lends more at this value, and the unused line grows |
| Wants monthly income for life | HECM | Only a HECM offers tenure payments |
| Home worth $2 million or more | HomeSafe Standard or Select | Counts the full value, up to $4 million |
| Age 55 to 61 | HomeSafe | A HECM requires age 62 |
| Low-rate first mortgage to keep | HomeSafe Second | Leaves the first mortgage in place |
| Condo not FHA-approved | HomeSafe | No FHA condo approval needed |
| Buying a smaller home | HECM for Purchase or HomeSafe for purchase | Depends on the price of the new home |
What Each Loan Costs
A HECM charges FHA mortgage insurance: 2% of the home's value up to the limit at closing, and 0.5% a year on the balance. On a $1.2 million home the upfront premium is $24,000. The origination fee is capped at $6,000. HomeSafe has no FHA premium, but its interest rates are usually higher.
The difference shows up in how fast the balance grows. Here is $300,000 borrowed at closing with nothing repaid.
| Years | HECM at 7.25% (6.75% Rate + 0.5% MIP) | HomeSafe at 8.75% | Difference |
|---|---|---|---|
| 5 | $430,605 | $463,912 | $33,307 |
| 10 | $618,070 | $717,382 | $99,312 |
| 15 | $887,147 | $1,109,340 | $222,193 |
Rates are examples, not quotes. Balances assume monthly compounding and no payments. The HECM's upfront premium is added to its balance and is not shown here.
On a home both loans can serve, the HECM usually costs less over time. You can make payments on either loan at any time to slow the growth, with no prepayment penalty.
Who Qualifies and What California Requires
- Age. 62 for a HECM. 55 for HomeSafe in California.
- Equity. Enough that the loan can pay off any existing mortgage, except with HomeSafe Second, which sits behind it.
- Primary residence. You live in the home most of the year.
- Financial assessment. The lender reviews your income, credit and history of paying taxes and insurance. If it is thin, part of the loan may be set aside to pay them for you.
- Counseling. California requires a session with a HUD-approved counselor, chosen from a list of at least ten, and the lender cannot take your final application or charge fees until seven days after it.
A Step-by-Step Plan
- Write down the goal. Remove a payment, build a reserve, help family, or buy a different home.
- Gather three numbers: your home's likely value, your loan balance and rate, and the age of the youngest owner.
- Get a side-by-side quote. We price a HECM and the HomeSafe options on the same day.
- Complete counseling with an independent counselor, then wait the seven days California requires.
- Apply, appraise and close. Most reverse mortgages close in 30 to 45 days.
- Keep a tax and insurance reserve so you never fall behind on the bills that keep the loan in good standing.
Risks and Mistakes to Watch For
- Falling behind on property taxes or insurance. This is the most common reason a reverse mortgage becomes due.
- Leaving a younger spouse off the loan. If your spouse is too young to be a borrower, ask exactly what protection they have to stay in the home after you are gone.
- Taking a large lump sum you do not need. Interest accrues on every dollar from day one. A line of credit costs nothing until you draw.
- Moving into care. More than 12 months in a care facility usually means the home is no longer your primary residence and the loan becomes due.
- Losing a low-rate first mortgage. If yours is under 4%, look at HomeSafe Second before a loan that pays it off.
The Bottom Line
A HECM is still the right answer for most California homeowners over 62 with homes under about $1.25 million. It lends more at those values, it is the only loan with lifetime monthly payments, and its line of credit grows. HomeSafe fills the gaps the HECM leaves: higher-value homes, borrowers 55 to 61, condos without FHA approval, and owners who want to keep a low-rate first mortgage.
Start with the side-by-side numbers. Our HECM reverse mortgage and proprietary reverse mortgage pages explain each loan, and we will price both for your home.
HECM or HomeSafe? See both on one page.
Call Bill Lewis at (310) 614-5920 and we'll compare every reverse mortgage option for your age, your home and your current loan.
Get a Free ConsultationFrequently Asked Questions About Reverse Mortgages in California
What is the difference between a HECM and a proprietary reverse mortgage?
A HECM is insured by FHA, starts at 62 and counts the home's value only up to $1,249,125 in 2026. A proprietary reverse mortgage such as HomeSafe is backed by a private lender, starts at 55 in California, lends up to $4 million and has no FHA mortgage insurance. Both are non-recourse and require no monthly mortgage payment.
What is the minimum age for a reverse mortgage in California?
62 for a HECM and 55 for HomeSafe loans in California. For a HECM it is the youngest borrower's age that sets how much you can borrow, so a younger spouse lowers the amount.
Can I get a reverse mortgage if I still have a mortgage?
Yes. A HECM or HomeSafe Standard pays off your current loan at closing, and the payment goes away. HomeSafe Second is the exception: it leaves your first mortgage in place and you keep paying it.
How much does a reverse mortgage cost?
A HECM charges a 2% upfront FHA premium, a 0.5% annual premium and an origination fee capped at $6,000, plus normal closing costs. HomeSafe has no FHA premium but usually a higher rate. Over ten years on the same balance, the rate difference usually matters more than the upfront fees.
Will my heirs lose the house?
Not if they want to keep it. They can pay off the loan, often with a new mortgage, or sell the home and keep any equity left. If the balance is higher than the home's value, they owe nothing more.
Is a reverse mortgage a good idea if I plan to move in a few years?
Usually not. Closing costs, and on a HECM the upfront FHA premium, are spread over the years you stay. If you expect to move within about five years, a HELOC or selling may cost less.
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About the Author: Bill Lewis
Mortgage Loan Originator, Choice One Mortgage · NMLS #284797
Bill Lewis has spent more than 30 years helping Southern California homebuyers and the Realtors who serve them structure financing that fits their real situation. Based in La Quinta, Choice One Mortgage serves buyers throughout the Coachella Valley, Ventura County, and the South Bay. Learn more about our team or call (310) 614-5920.
This article is general information, not legal, tax or financial advice. HECM limits and premiums are HUD's for 2026. HomeSafe is a proprietary reverse mortgage product, is not a HECM and is not insured by HUD or FHA; its ages, amounts, rates and availability are set by the lender and can change. Loan amounts and rates in the examples are illustrative, not quotes. A reverse mortgage accrues interest and fees, and the borrower must live in the home and pay property taxes, insurance and maintenance or the loan can become due. California requires reverse mortgage counseling before you apply. This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property valuation. Equal Housing Opportunity. COMC, Inc. dba Choice One Mortgage Company. Licensed by the CA DRE #01238593. NMLS #233784.