A jumbo reverse mortgage is an oversized reverse mortgage that enables senior homeowners of high-value homes to borrow up to $4 million of the property's equity. These loans, also known as private or proprietary reverse mortgage loans, are not subject to the same regulations as government-backed home equity conversion mortgages (HECMs), which leads to higher borrowing limits (hence the name jumbo) but potentially fewer safeguards in these loans.

What Is a Jumbo Reverse Mortgage?

• Jumbo reverse mortgages are designed for senior citizens who own expensive real estate, are cash-strapped, and require greater access to their home equity than government-insured reverse mortgages permit.

• Common eligibility requirements include the borrower owning more than fifty percent of their home's equity, living in the home as their primary residence.

• The amount you can borrow typically depends on your age, the appraised value of your home, and the amount of equity you have in the property.

• Generally, the recipient of a reverse mortgage is not required to repay the loan amount plus interest for as long as they continue to reside in the home.

• Less regulation means that jumbo reverse mortgage terms can vary substantially between lenders.


A jumbo reverse mortgage is a private loan that allows homeowners to borrow more than the Home Equity Conversion Mortgage (HECM) loan limits established by the Federal Housing Administration.

Definition with Examples of a Jumbo Reverse Mortgage

Jumbo reverse mortgages are available to homeowners over the age of 62. What distinguishes it from other reverse mortgages is that jumbo reverse mortgage borrowers can access larger amounts than the Federal Housing Administration's (FHA) HECM reverse mortgages allow. Non-HECM loans are not insured by the federal government, but they may be attractive to owners of high-value homes.


In 2022, the HECM loan limit is $970,800. If you wish to borrow more, you must apply for a jumbo reverse mortgage on your high-value home.

As with all reverse mortgages, the purpose of a jumbo reverse mortgage is to allow older homeowners to borrow against their home equity and gain access to cash. You will still be responsible for paying property taxes and homeowner's insurance, but instead of a monthly mortgage payment, the lender will make payments to you.

Alternate definition: A jumbo reverse mortgage is a private reverse mortgage without a loan limit or cap.

Alternate names: Proprietary reverse mortgage; Non-HECM reverse mortgage

Here is an illustration of how a jumbo reverse mortgage works. Say a 65-year-old homeowner of a home worth $1.5 million desires to utilize their home equity. They may need a lump sum to cover a medical bill or to supplement a fixed income that leaves them with little money at the end of the month.

After approval of their jumbo reverse mortgage, the homeowner receives a lump sum payment. They are no longer required to make a monthly mortgage payment, but they are still responsible for property taxes, insurance premiums, and home maintenance expenses.

How the Jumbo Reverse Mortgage Works

Typically, to qualify for a jumbo reverse mortgage, you must be at least 62 years old, live in the home as your primary residence, and have a minimum amount of equity.


Some jumbo reverse mortgage lenders may have a minimum borrowing age of 55 or 60 years old. The minimum age requirement for a jumbo reverse mortgage may also vary by state.

If you have an existing mortgage, the reverse mortgage funds will be used to pay it off before you receive the remaining loan proceeds. Others may offer monthly payments or lines of credit. The amount of your jumbo reverse mortgage is determined by your age, the interest rate, and the home's appraised value. After receiving the funds, there are no restrictions on how they may be spent.


Before applying for a jumbo reverse mortgage, confirm that the lender's process meets your needs by inquiring about how you will receive the proceeds.

As monthly interest and fees accumulate, your loan amount increases and your equity decreases, the opposite of what happens with a conventional mortgage. For the duration of the jumbo reverse mortgage, no payments are required. If you decide to sell or vacate the property, or if you die, the loan balance will become due. Because a jumbo reverse mortgage is a non-recourse loan, your heirs will not inherit this obligation. However, the amount will be deducted from their inheritance when the home is sold.

Eligibility requirements for a Jumbo reverse mortgage

Because these loans are not backed by the federal government, evey jumbo reverse mortgage lender has greater discretion over who qualifies. Common eligibility requirements include the borrower owning more than fifty percent of the home's equity, residing in the home as their primary residence, and being at least 55 years old.

How much is your credit limit?

The amount you can borrow depends on your age, the appraised value of your home, and the amount of equity you have in the property. The maximum sum available is $4 million. However, in order to qualify for a loan of that size, the applicant must have at least that amount of their own equity invested in the property.

Consider carefully before committing to one of these loans. There may be alternative, less expensive ways to obtain the money you urgently require.

When is the repayment of the jumbo reverse mortgage due?

As with conventional reverse mortgages, these loans become due upon the occurrence of a specific maturity event, rather than on a fixed date.

The recipient of a reverse mortgage is generally not required to repay the loan amount plus interest for as long as they remain in the home. Typically, maturity events occur on the following dates:

• The borrower passes away.

• When the property is sold.

• When the Home tittle is transferred to other person.

• When the home owner is not using as a principal residence or when the borrower is not living in the residence for majority of the year.

• The borrower falls behind on property tax and homeowners insurance payments.

• The borrower neglects to repair the property, which is falling apart.

Jumbo reverse mortgages are not as prevalent as conventional reverse mortgages and vanished for a time after the housing bubble burst and the 2008 property price crash.

Alternatives to the Jumbo Reverse Mortgage

Even if their home has been appraised at a high enough value, a jumbo reverse mortgage may not be the best option for all older homeowners. If paying your regular mortgage has become difficult or if you need access to cash, it may be prudent to investigate alternative options, such as:


If you can stay within the loan limits of an FHA-backed reverse mortgage program, it may be a safer option with lower interest rates than a conventional loan. However, mortgage insurance premiums are required.

• Home equity line of credit (HELOC):

Because you'll only borrow what you need as well as pay interest on that amount, a HELOC is ideal if you prefer peace of mind to a large cash infusion.

• Refinance:

If you want to reduce your monthly mortgage payments, you may be able to do so by refinancing. In addition, if you qualify for a cash-out refinance, you will receive a lump sum.

• Home equity loan:

This product may be worth considering if you need cash to pay a bill or make home repairs. However, because a home equity loan is essentially a second mortgage, it is not suitable for someone who is already struggling to pay their monthly bills.

Sell your home:

Older homeowners with a high home value could potentially downsize by moving to a smaller, less expensive home, despite the fact that this may be an emotionally difficult decision. The proceeds from the sale of their home can provide some financial security and possibly fund leisure activities, such as travel.

Advantages and Disadvantages of Jumbo Reverse Mortgages


• No need for mortgage insurance

• Greater access to funds

• It is accessible at a younger age

More homes qualify


• Higher interest rate

• Greater responsibility for the borrower

• Less inheritance for heirs

Prone to scams

• Less flexible line of credit

Pros Explanation

• No need for mortgage insurance:

Since it is not a federally backed loan, you are not required to pay a mortgage insurance premium for a jumbo reverse mortgage. You will pay both an upfront mortgage insurance premium based on the value of your home and an ongoing premium of 0.5% of your outstanding balance with a HECM.

• Greater access to funds:

A jumbo reverse mortgage with no loan limits can help high-value homeowners access up to $4 million in equity, depending on the state and lender.

• It is accessible at a younger age:

An applicant must be at least 62 years old to qualify for a HECM. Depending on the lender, it is possible to access your home equity with a jumbo reverse mortgage at age 60 or even 55.

More homes qualify:

Your condominium does not need FHA approval to qualify for a jumbo reverse mortgage loan.

Cons Explanation

• Higher interest rate:

As a result of their lack of federal backing, jumbo reverse mortgages are typically associated with higher interest rates.

• Greater responsibility for the borrower:

Although private lenders are encouraged to entail counseling and adhere to HECM best practices, they are not mandated to do so. Unfortunately, some lenders may attempt to take advantage of older borrowers who lack a complete understanding of the terms. Be wary of potential predatory practices and deceptive advertising when considering jumbo reverse mortgages.

• Less inheritance for heirs:

This is not necessarily a "con" so long as you are aware that your equity will decrease over time. Ultimately, it allows you to enjoy the equity you've built in your home while you're still alive. However, it is important to be aware of this fact, as a reverse mortgage will reduce the amount of your inheritance.

Prone to scams :

Due to a lack of regulation, jumbo reverse mortgages are frequently targeted by fraudsters. Be wary of all solicitations, and if you believe you've been scammed, contact the Consumer Financial Protection Bureau (CFPB) immediately.

• Less flexible line of credit:

Lenders of jumbo reverse mortgages typically provide less flexible payment options. Unlike a HECM, you cannot choose to receive a monthly income for life, which can be useful as a pension supplement.

Whether the Jumbo Reverse Mortgage Worth It?

Under certain conditions, a jumbo reverse mortgage can be a prudent financial decision. If you have a substantial amount of equity in a high-value home and wish to remain in it for an extended period of time, a jumbo reverse mortgage enables you to tap into that equity to make your retirement years more enjoyable and less financially burdensome.

Obviously, this type of reverse mortgage is particularly advantageous during periods of rising home values and declining interest rates. If you believe that a jumbo reverse mortgage is a viable option for you, you should be aware that your equity will decrease over time, and you should conduct research to find a reputable lender.

What is the largest available reverse mortgage?

That depends. In 2022, the maximum amount that can be borrowed through a reverse mortgage with government backing is $970,800.

If you are eligible for a private or proprietary reverse mortgage loan, however, you could receive up to $4 million.

Who owns the home when a reverse mortgage is there?

When you obtain this type of loan, you retain ownership of your property. This will continue until the loan is repaid, at which point the home may need to be sold to cover the remaining balance.

Are funds derived from reverse mortgages taxable?

These payments are not taxable because they are loan repayments and not income.

How I calculate my home equity?

Home equity is your ownership interest in the home. To determine your home equity, deduct your mortgage balance (and any other liens) from the current market value of the property.

The Bottom Line

• A jumbo reverse mortgage is a private loan for older homeowners that exceeds the FHA's HECM program's loan limits.

• Borrowers are not required to pay mortgage insurance and can borrow up to $4 million.

• Since jumbo reverse mortgages are not federally insured, they have higher interest rates than HECM loans.

If you are considering a reverse mortgage on a jumbo-sized home, proceed with caution. Targets of predatory lenders are typically those seeking jumbo reverse mortgages.


 Please Wait!  You have to wait 30 seconds.
The Link Will Appear.......