What is the Difference Between a Reverse Mortgage & HECM?

A reverse mortgage is a broad term that refers to any type of loan that allows homeowners aged 62 or older to borrow against the equity in their home without making monthly mortgage payments. The loan is repaid when the borrower moves out, sells the home, or passes away.

There are several types of reverse mortgages, and “reverse mortgage” simply describes the loan’s structure — not the specific program.

HECM – Home Equity Conversion Mortgage

A HECM is the most common and federally-insured reverse mortgage in the U.S. It’s backed by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD).

Key features of a HECM:

• Strict federal consumer protections

• Mandatory third-party counseling before applying

• Flexible payment options (monthly income, line of credit, lump sum, or combo)

• No monthly mortgage payments required

• Non-recourse loan — you’ll never owe more than the value of the home

• Available only to homeowners 62 or older, living in their primary residence

Proprietary Reverse Mortgages

• Private loans offered by banks or mortgage lenders

• Typically for higher-value homes

• Not insured by FHA or governed by HUD rules

• May allow for larger loan amounts, but with fewer protections

Most reverse mortgages you hear about today — especially in advertising or from licensed mortgage lenders — are HECMs, because they’re safe, standardized, and widely available.

Learn more about eligibility requirements for a reverse mortgage, situations where a reverse mortgage is best used, and common myths around reverse mortgage that we debunk with facts