A HECM application and a proprietary reverse mortgage application are different processes. Jay Zayer, CRMP, is a reverse mortgage specialist at reversemortgage.coach. The HECM path uses HUD-approved counseling under 24 CFR 206.41, an FHA roster appraisal, a financial assessment under Mortgagee Letters 2014-21 and 2014-22, and FHA mortgage insurance. A proprietary path uses private underwriting, no FHA MIP, and lender overlays. One seminar packet is not both files.
Imagine a couple who are Moss, 74, and a spouse, occupying a high-value house in Pasadena, California. The HECM claim amount still stops at $1,249,125 for 2026. A proprietary note can size to value above that cap when the overlay fits. See what a proprietary reverse mortgage is for the product. Stay here for how the applications diverge.
A HECM remains FHA-insured. A proprietary note is not a government jumbo stipend.
What steps are unique to a HECM application?
HUD counselor list. HUD-approved session. California’s seven-day hold under Civil Code 1923.2(k) before a complete application. FHA case number. FHA roster appraisal. Financial assessment. Upfront MIP is a flat 2.00% of maximum claim amount per Mortgagee Letter 2017-12. Annual MIP of 0.50% of outstanding balance. Origination still capped at $6,000 under 24 CFR 206.31. 2026 files still use the $1,249,125 cap in Mortgagee Letter 2025-22.
Moss’s HECM leftover cash still sits in the mid-30s to low-50s percent of that capped claim amount, depending on age and expected rate. I will not quote a live cell. Run the HECM worksheet. Run a proprietary Loan Estimate too when value sits above the cap. Do not interpolate HUD rows.
Counseling still costs $125–$175 on the HECM path. The HUD certificate lasts 180 days. Do not burn that clock on a proprietary-only file unless the channel actually wants the certificate.
What steps are unique to a proprietary application?
Private appraisal rules. Private residual-income or credit overlays. No FHA case number. No Mortgagee Letter 2017-12 MIP. Age can start at 55 in California on programs Jay closes — HomeSafe, Longbridge Platinum, Finance of America, and Mutual of Omaha Secure Equity. Occupancy still has to be true if the program requires a principal residence. Confirm exhibits. I will not invent a HUD visa chart, an acre cap, or an Arizona proprietary minimum as HUD law.
If residual income requires a LESA, that is a HECM tool. Proprietary set-asides, if any, follow the channel. Jay confirmed a HECM LESA cannot be added or modified after closing. Do not assume a private note uses the same LESA sentence.
Arizona Tempe files still start HECM applications at 62 under 24 CFR 206.33. They skip 1923.2(k). Proprietary availability remains lender-specific.
When should we run both applications, and when is that waste?
Run both when leftover HECM cash on the cap is a token and a proprietary estimate might reach the goal, or when age is 55–61 in California. Do not run both when occupancy fails. Occupancy is still 24 CFR 206.39 on a HECM and still a principal-residence test on the private notes I originate. Two packets will not occupy a weekend house.
A second geography: a 66-year-old in Peoria, Arizona, whose house is under the 2026 cap. A HECM application is usually the first file. A proprietary application is a comparison, not a default. Compare Loan Estimates. I will not promise proprietary “wins.”
An adjustable HECM after a HECM application closes still accrues at 1-month CMT plus lender margin. Expected rate still rounds to 0.125% under 24 CFR 206.3. Proprietary indexes follow that note. Jay still quotes about 30 days on a complete HECM refinance. Private calendars vary. I will not quote a private day-count as a HUD average.
Heirs who later keep a HECM house repay the outstanding loan balance under 24 CFR 206.125(a)(2)(i). Proprietary heir rules follow that note, not 24 CFR 206.125. Read the documents. Do not import FHA non-recourse sentences onto a private contract without reading it.
Who should not send one packet and hope both channels stamp it?
This path does not help a household that wants a single PDF to be a HECM and a proprietary file. Occupancy is still the first no. I work with multiple lenders. I will originate the path whose application actually matches the goal. I will turn away a blended-packet plan whose only thesis is that “jumbo” is a HUD checkbox.
If leftover HECM cash after 2.00% of claim amount is decorative and proprietary overlays do not fit, skip both. Two applications cannot invent a reason to close.
Eligible on a HECM stack is not qualified leftover cash. Qualified leftover cash on a proprietary worksheet is not FHA insurance. Name which application you are filling out. Then fill out that one.
Does a HECM case number block me from a proprietary application later?
Not as a HUD lifetime bar. A case number is a HECM file. If occupancy fails, neither application should proceed. If the HECM cap is the problem and occupancy is true, a proprietary estimate can still be the next packet. Moss’s Pasadena high-value house can support that comparison. Peoria files under the cap usually start HECM-first.
Do not run two case numbers as a hobby. Counseling still costs $125–$175 on the HECM path. Do not burn 180 days on a proprietary-only goal unless the channel wants the certificate.
I will originate the application that matches the goal. I will turn away a dual-packet plan whose house is empty.
Which application should a 60-year-old California homeowner start with?
Not a HECM. 24 CFR 206.33 still starts HECM borrowers at 62. Moss at 74 can choose. A 60-year-old in Pasadena starts proprietary if occupancy is true and a program Jay closes will accept the age — HomeSafe, Longbridge Platinum, Finance of America, or Mutual of Omaha Secure Equity. Peoria Arizona at 60 is even more overlay-specific. I will not invent an Arizona proprietary floor as HUD law.
Occupancy still decides. Age without occupancy is still a no. Moss at 74 can compare both packets. A 60-year-old cannot start a HECM. Occupancy still decides before either logo. I will originate the file that matches the goal.