A Home Equity Conversion Mortgage (HECM) is the FHA-insured reverse mortgage, and it comes with a step most loans do not have: before anyone can apply, they must complete counseling with a HUD-approved reverse mortgage counseling agency. I think it is one of the best parts of the process, so it is worth explaining what actually happens in that session.
The counselor does not work for the lender
That is the whole point. The counselor is independent. They are not paid to sell the loan, and they do not answer to me or to any lender. Their job is to make sure the borrower understands the decision before money or paperwork enters the picture.
What the session covers
A counseling session generally walks through:
- How a HECM works, and how the loan balance grows over time
- What the homeowner still has to pay: property taxes, homeowners insurance, and upkeep
- What can cause the loan to become due and payable
- The alternatives, including doing nothing, downsizing, or a different kind of loan
- How proceeds might affect taxes, benefits, and what passes to heirs
Why it matters to families
The people who care about this decision are rarely just the borrower. A spouse, an adult child, a financial planner, or a CPA often has a stake in it. Counseling gives everyone a neutral, informed starting point — which is exactly the kind of conversation I would rather have than a sales pitch.
What I do and do not do
I can help someone prepare for counseling. I cannot choose the counselor for them, answer for them, or replace the session. That separation is deliberate, and it protects the borrower.
If you are weighing a reverse mortgage, or you are a planner or CPA with a client who is, the counseling requirement is a feature, not a hurdle. Start there.
General information, not advice. Reviewed by Nick Cunningham, Loan Officer, NMLS #907393.