HECM vs Proprietary Reverse Mortgage

A side-by-side explanation of FHA-insured HECMs and private proprietary reverse mortgage programs.

HECM vs Proprietary Reverse Mortgage
Direct Answer
A HECM is a Home Equity Conversion Mortgage insured by the Federal Housing Administration. A proprietary reverse mortgage is a private reverse mortgage offered by a private lender and is not the FHA-insured HECM program.
Comparison
 Topic  HECM  Proprietary Reverse Mortgage 
---------
 Insurance  FHA-insured  Private program 
 Counseling  HUD-approved counseling is part of the HECM process  Counseling and requirements depend on program and state rules 
 Loan limits  FHA program rules apply  Private lender/program rules apply 
 Best-fit discussion  Common baseline option for eligible homeowners age 62+  May be relevant for higher-value homes or needs outside HECM limits 
 Review needed  FHA/HUD and lender rules  Private program, state law, and lender rules 
Important Cautions
Do not assume private means easier, cheaper, or better. Compare costs, proceeds, obligations, protections, servicing, repayment triggers, and long-term effect on heirs.
Source Notes
- HUD HECM information: https://www.hud.gov/hud-partners/single-family-hecmhome
- FTC reverse mortgage guide: https://consumer.ftc.gov/articles/reverse-mortgages

Reviewed by Nick Cunningham, NMLS #907393. Educational content only, not personal financial, legal, tax, or benefits advice.