Quick Answer
The FHA-insured HECM is the federal reverse mortgage, capped at the FHA lending limit, with mortgage insurance, a non-recourse guarantee, and required HUD counseling. A jumbo (proprietary) reverse mortgage is a private loan for higher-value homes that exceed the FHA limit; it can unlock more equity and sometimes starts at a younger age, but it is not FHA-insured. For most homes within the FHA limit the HECM is the better fit, while owners of high-value California homes often compare a jumbo to access more of their equity.
The Two Main Types for California Homeowners
Reverse mortgages come in two broad forms relevant to most homeowners: the FHA-insured Home Equity Conversion Mortgage (HECM) and proprietary reverse mortgages, often called jumbo reverse mortgages. The HECM is government-insured and standardized, while jumbo products are designed by private lenders to serve higher-value homes. Each has clear strengths depending on your home's value and your goals.
The FHA HECM: Federally Insured and Counseled
The HECM is the most common reverse mortgage. It is insured by the FHA, includes a non-recourse guarantee so you and your heirs never owe more than the home's value at sale, and requires independent HUD-approved counseling. Its main limitation is the FHA lending limit, which caps the home value the loan can consider, so very high-value homes cannot tap all of their equity through a HECM alone.
The Jumbo Reverse Mortgage: For Higher-Value Homes
Proprietary jumbo reverse mortgages are private loans built for homes worth more than the FHA limit allows the HECM to recognize. They can let owners of high-value properties access substantially more equity, and some programs are available starting at younger ages than 62. Because they are private, terms, rates, and protections vary by lender, so careful comparison matters.
Key Differences at a Glance
Here's how the two programs compare row by row. Neither column is the automatic winner — for most homes the FHA lending limit decides it, and above that limit the jumbo earns a serious look.
Side-by-side: FHA-insured HECM vs. proprietary jumbo reverse mortgage| Feature | HECM (FHA-Insured) | Jumbo (Proprietary) |
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| Insured by the FHA | Yes | No |
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| Home value the loan can consider | Capped at the FHA lending limit ($1,249,125 in 2026) | Well above the FHA limit — often into the millions |
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| Minimum age | 62 | Often around 55, depending on lender and state |
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| Non-recourse protection | Yes — federal guarantee | Reputable programs include their own provision — confirm in the loan terms |
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| FHA mortgage insurance premium | Yes | No |
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| HUD-approved counseling | Required | Counseling required for California borrowers |
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| Payout options | Lump sum, growing credit line, or monthly advances | Varies by lender — often a lump sum |
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| Rates and terms | Standardized under FHA rules | Set by each private lender — compare carefully |
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Which One Is Right for You?
If your home value is at or below the FHA lending limit, the HECM is usually the better choice because of its federal insurance, standardized protections, and flexible payout options. If your home is worth well above the FHA limit, a jumbo may let you access more of your equity, but you should weigh the absence of FHA insurance and compare the specific terms. Many borrowers benefit from seeing both options modeled.
Why California Homeowners Often Compare Both
California has a high concentration of homes valued above the FHA lending limit, especially in coastal and high-demand areas. For those owners, the choice between a HECM and a jumbo can mean a meaningful difference in accessible funds. The right answer depends on your home's value, your age, and your goals, which is why a side-by-side comparison is so useful. Miguel A. Vazquez, NMLS #401212, at Reverse Mortgage Plus, a licensed California broker, can model both for you with no pressure.
