Start with a goal, run the calculator, then complete HUD-approved counseling under 24 CFR 206.41. California adds a ten-agency list and a seven-day wait before a complete application. Jay Zayer, a CRMP licensed in California and Arizona, uses a fixed order: goal, calculator, HUD counseling, then application. A Home Equity Conversion Mortgage (HECM) is FHA-insured. It is not a government benefit. Skipping the order is how people buy a certificate for a dead file.
Walk through this example: a household has heard the word “reverse” for years and wants the first useful action, not the fiftieth article.
This page is not “how a HECM works” as a machine. It is not the advisor-interview list. It is not the 100-question library map. It is the first-week sequence I want you to use in California or Arizona.
What goal has to be named before anyone runs a proceeds estimate?
Say out loud what has to be true after closing. Pay off a first mortgage so the coupon ends. Hold a reserve for taxes. Fund a repair the appraiser will require. Stay in the house without a new 30-year payment. Those are goals. “Get as much as possible” is not a goal. “See what I qualify for” is a shopping phrase.
If the house is not your principal residence, stop. 24 CFR 206.39 will fail before anyone should spend money. If the youngest person who must be a borrower is not 62, a HECM will fail (24 CFR 206.33). In California, a proprietary reverse mortgage may still be a conversation when HUD age is the blocker. If HUD age is the first-week blocker in California, Jay can discuss proprietary programs including HomeSafe, Longbridge Platinum, Finance of America, and Mutual of Omaha Secure Equity. Confirm the lender’s minimum age in writing.
If the goal is a sale, do not originate a HECM to “test the waters.” If the goal is an investment purchase with leftover cash, that is a file I turn away. The CFPB has warned consumers against using reverse-mortgage proceeds to buy investments or annuities.
Write the goal in one sentence. Bring it to counseling. If we cannot name it, we are not ready for a certificate.
When do you use the calculator, and when do you book counseling?
Use the calculator second. I do not publish a live principal-limit percentage. Run the calculator second; at typical expected rates, first-week estimates still land in HUD’s mid-30s to low-50s published band. The first-week proceeds model still cannot exceed the 2026 claim-amount cap of $1,249,125 (Mortgagee Letter 2025-22).
Subtract the live payoff. Subtract a working cost stack. Initial MIP is 2.00% of claim amount on every HECM (Mortgagee Letter 2017-12). First-week cost math still uses 24 CFR 206.31 origination: the greater of $2,500 or the 2%/1% formula, capped at $6,000. Third-party fees still sit on the settlement statement. A Life Expectancy Set-Aside (LESA), if the later financial assessment requires one, is built only at origination and withholds still more. If the leftover is already negative on a honest estimate, do not book counseling yet. Bring cash, shrink the payoff, wait for a real HUD age-cell change, or pick a sale.
If the leftover can work, book HUD-approved counseling third. At first contact on a HECM, 24 CFR 206.41 still requires Jay to give a HUD counselor list before anyone books a session. Every borrower, and any Non-Borrowing Spouse who will rely on HUD deferral, must complete it. I do not sit in. See HUD reverse mortgage counseling for what the session covers, and how to find a counselor if you need the official search.
Counseling typically costs $125–$175. The certificate is valid for 180 days. Spending that clock on a file you already know fails occupancy is how families rush a bad application in month five.
Here’s how this plays out: a 70-year-old named Denise in Flagstaff can name the goal (end a first-mortgage coupon), and the calculator leftover still covers that payoff plus costs. She books counseling. Arizona has no seven-day Civil Code hold. The complete application can follow the federal sequence. A typical refinance averages about 30 days. That is not a promise.
What extra California clocks sit on top of 24 CFR 206.41?
California Civil Code section 1923.2(j) requires a list of at least ten HUD-approved reverse-mortgage counseling agencies. Section 1923.2(k) then bars a final and complete reverse-mortgage application, and any fees, until seven days after the counseling date. Those rules sit on top of 206.41. They do not replace it.
A follow-up: can I “start the application” in Modesto the afternoon I finish counseling so we save a week? No. I will not accept a complete California application inside that seven-day window. Gathering papers is fine. A complete file and fees are not.
Arizona skips 1923.2. Counseling still comes first. The certificate still lasts 180 days.
After you close, an adjustable HECM still accrues at 1-month CMT plus the contracted lender margin. I do not quote a live index. Annual MIP of 0.50% of the outstanding balance (Mortgagee Letter 2017-12) will accrue after closing. Tell heirs early that a later keep-the-house payoff is the outstanding balance under 24 CFR 206.125(a)(2)(i).
If you want to know who I am and how I work before you book anyone, read About. That is not a substitute for counseling. It is a credential and process check.
What belongs in the application folder after counseling, not before?
After the certificate — and after California’s seven days — the complete application can start. Identity, income proofs, insurance declarations, tax receipts, HOA ledgers if any, and a live payoff letter. Trust documents if the house is in a trust. A non-borrowing owner who remains on title still has to sign under 24 CFR 206.35.
Do not pay for an appraisal as your first act. Paying it before counseling, before the California wait, or before you know the payoff math is how people fund a dead file.
What can go wrong: counseling is booked, the 180-day clock starts, and only then does someone mention the unapproved condo, the spouse still on title, or the PACE assessment. Screen those items when you name the goal. Another miss: treating my first conversation as the counseling session. It is not.
A second geography: a Modesto owner who already has a goal and a workable calculator leftover. California’s ten-agency list and seven-day wait still apply. Use the wait to request payoff letters so they are still live when underwriting opens. Expired payoffs are how a 30-day average becomes 45 days.
24 CFR 206.25 still caps first-year disbursements after closing. The 60% rule is a first-year draw cap, not an MIP discount. You do not need to pick a payment plan on day one of considering the loan. You do need a goal.
Who should stop before a counseling certificate is even issued?
This sequence does not help a household that cannot name a goal. I will send you home to write one. It does not help someone whose occupancy already fails. It does not help a file whose payoff plus MIP already overflows the principal limit unless cash is real. It does not help a person who wants me to “handle counseling so you do not have to.”
If the first useful action is an interview of the originator, that is the questions-to-ask page. If you want the machine after a certificate, that is how-a-reverse-mortgage-works. First week: goal, calculator, counseling, then application.