Loan Program
Reverse mortgages, explained without the sales pitch.
For homeowners 62 and older. Counselling is required, and that requirement is a feature.
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Loan Selection
Reverse Mortgage
For homeowners 62 and older. Counselling is required, and that requirement is a feature.
Non-Recourse, Insured by FHA
If the balance exceeds the property's value when the loan ends, FHA insurance covers the shortfall. Heirs never owe the difference.
Taxes and Insurance Remain Yours
Property taxes, insurance and upkeep stay your responsibility, and defaulting on them can trigger foreclosure. In Texas that matters.
Independent Counselling Is Required
HUD mandates a session with an approved counsellor before proceeding. The requirement exists because this product has been mis-sold.
Reverse Mortgage Full Description
Everything you need to know before you apply.
A reverse mortgage lets a homeowner aged 62 or older convert part of their equity into cash without monthly mortgage payments. Almost all of them are Home Equity Conversion Mortgages, insured by FHA. The loan is repaid when the last borrower dies, sells, or stops using the home as a principal residence, and it's non-recourse: if the balance ends up above the property's value at that point, FHA insurance covers the shortfall and neither the borrower nor the heirs owe the difference. How much you can draw depends on the youngest borrower's age, prevailing rates, and the property's value up to the HECM limit, which for 2026 is $1,249,125.
Not sure if a reverse mortgage fits your situation?
What You Still Have to Pay
The part that gets people into trouble is what a reverse mortgage doesn't remove. You remain responsible for property taxes, homeowner's insurance and maintaining the home, and failing on any of those can trigger foreclosure just as a missed payment would on an ordinary mortgage. In Texas, where property taxes are high and rising, that obligation isn't a footnote. The balance also grows over time rather than shrinking, since interest and mortgage insurance accrue onto it, and that steadily reduces what is left for heirs. HUD requires counselling with an independent approved counsellor before you can proceed, and that requirement exists because this product has been mis-sold historically. Treat it as genuinely useful protection rather than a formality to get through.
If you would like to explore whether a reverse mortgage matches your purchase price, credit profile and long-term budget, reach out to 3E Lending to speak with our licensed Texas mortgage team in Katy.
Reverse Mortgage - Quick Reference
Straight answers to what borrowers ask most, each one showing the guideline or investor practice it comes from — so you can see where the answer came from, not just take our word for it.
Credit Score
No minimum score. A financial assessment reviews your ability to meet taxes and insurance.
Source: 24 CFR 206.37; HUD Handbook 4000.1 II.B.5 · varies by lender
Credit History / Strength
Property charge payment history is assessed; shortfalls can require a set-aside.
Source: 24 CFR 206.37, 206.205; HUD Handbook 4000.1 II.B.5.b-c
Interest Rates
Fixed or adjustable. Interest accrues onto the balance rather than being paid monthly.
Source: 24 CFR 206; HUD Handbook 4235.1
Income / Employment Verification
No income requirement to qualify, but a financial assessment is mandatory.
Source: 24 CFR 206.37; HUD Handbook 4000.1 II.B.5.e-f
Self Employment Qualifications
Not applicable. Employment income is not the qualifying basis.
Source: HUD Handbook 4000.1 II.B.5.e-f; 24 CFR 206.37
Documentation Difficulty
Moderate. Counselling with a HUD-approved counsellor is mandatory, and the financial assessment file is prescribed.
Source: 24 CFR 206.41 (counselling); HUD Handbook 4000.1 II.B.5
Debt to Income (DTI)
Not calculated conventionally. Residual income is reviewed instead.
Source: 24 CFR 206.37(b)(1)(ii); HUD Handbook 4000.1 II.B.5.f
Down Payment Requirement
None on a refinance. A HECM for Purchase requires a substantial contribution.
Source: 24 CFR 206.44; HUD Handbook 4000.1 II.B.8.a
Down Payment Collateral Alternatives
For HECM for Purchase the contribution must be from acceptable, sourced funds.
Source: 24 CFR 206.44(b); HUD Handbook 4000.1 II.B.8.a
Out of Pocket Fees
FHA mortgage insurance premium, origination and closing costs, mostly financeable.
Source: 24 CFR 206.105 (MIP); 24 CFR 206.31 (origination and closing) · varies by lender
Process Speed / Timeframe
45-60 days. Counselling must complete before an application can proceed.
Source: Industry standard, 2026 · varies by lender
Figures on this page reviewed by Kimberli Pham, Mortgage Broker · NMLS ID 2459395, on . Program terms are set by the lender a file is placed with and change over time — each figure cites its source above.
The figures above are program guidelines and illustrative examples, not a quote. Actual terms vary by circumstances - your credit profile, income, the property, occupancy, loan amount, and the lender the file is placed with. Individual lenders also apply their own overlays on top of agency minimums. Nothing on this page is a commitment to lend. Approval depends on completion of underwriting, and not every applicant qualifies.
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