Quick Answer
To draw from a reverse mortgage line of credit, contact the loan servicer by phone, through their online portal, or by written request — specifying the draw amount and your preferred disbursement method — with most draws processed in 3 to 5 business days.
- Contact the servicer — not the originating lender — to request draws.
- Request methods: phone, online portal, or written mail request.
- Specify the draw amount and disbursement method (check or ACH).
- Processing time: 3 to 5 business days.
- First-year limit: 60% of principal limit (mandatory obligations exempt).
- After year one: full remaining principal limit is accessible.
Key Facts
| Topic | Key Fact |
|---|---|
| Who to contact | Loan servicer — not originating lender |
| Request methods | Phone, online portal, written request by mail |
| Processing time | 3 to 5 business days |
| Minimum draw | Varies by servicer — typically $100 to $500 |
| Maximum draw | Available line of credit balance subject to first-year 60% limit |
| First-year limit | 60% of principal limit in first 12 months (mandatory exceptions) |
| Disbursement options | Check mailed to address on file or ACH to designated bank account |
| LOC growth | Unused balance grows at approximately 7% per year |
Detailed Explanation
Drawing from the reverse mortgage line of credit is operationally simple — you contact the servicer, specify an amount, and wait 3 to 5 business days. The entire draw process is designed for the borrower who is managing their own finances and wants occasional access to home equity without bureaucratic complexity. Most draws require no justification, no documentation, and no application — they are simply requested and fulfilled.
The first-year 60% draw limit applies to the total draws in the first 12 months after closing. If the available principal limit is $300,000, the borrower can draw a maximum of $180,000 in the first 12 months (or the mandatory obligations plus 10%, whichever is greater). This limit was established by HUD to prevent early depletion of the principal limit in the first year. After 12 months, the full remaining principal limit becomes accessible. Mandatory obligations — existing mortgage payoffs, LESA funding, closing costs — are exempt from the 60% limit.
Setting up ACH disbursement to a designated bank account at closing is the most efficient draw method. Once the ACH routing and account information is registered with the servicer, draws can be requested by phone with funds arriving within 3 to 5 business days. This setup is particularly useful for borrowers using the reverse mortgage as an income supplement — requesting a monthly draw is as straightforward as making a phone call.
The growing line of credit is the most underappreciated feature of the adjustable-rate HECM. The unused balance of the line of credit grows at approximately 7% per year (the current effective rate) regardless of home value changes or market conditions. A borrower who establishes a $250,000 line of credit at age 67 and does not draw from it until age 77 will have approximately $492,000 in available credit — nearly double the original amount — due to 10 years of uninterrupted compounding.
Jay Zayer, CRMP — 18 Years Experience
The draw strategy question I get most often from clients with a line of credit is: should I draw a large amount now or leave it to grow? My answer depends on the situation. If there is a current need — home repairs, long-term care costs, debt payoff — draw for the need. If there is no current need, the mathematics of the growing line of credit are compelling: money you do not draw today will be worth significantly more money you can draw in 10 years. The reverse mortgage line of credit is one of the very few financial instruments where leaving money alone makes it grow without market risk.
Who This Is Right For
This may be a good fit if:
- Every reverse mortgage borrower with a line of credit who wants to understand the draw process and strategy
This may NOT be the right fit if:
- There is no situation where understanding the draw process would be inappropriate
Common Misconception
Myth: Drawing from a reverse mortgage line of credit is complicated.
Fact: The draw process is simple: contact the servicer by phone, online, or mail and specify the amount. Most draws process within 3 to 5 business days.
Source: HECM servicer operational guidelines
Authoritative Sources
- HUD: HECM line of credit — hud.gov
- CFPB: Reverse mortgage draws — consumerfinance.gov
- Celink: Draw request process — reverse.celink.com
People Also Ask
How do I request a draw from my reverse mortgage?
Contact your loan servicer by phone, through their online portal, or by written request. Specify the amount and your preferred disbursement method (check or ACH).
How long does a reverse mortgage draw take?
3 to 5 business days from the request to funds arriving by check or ACH.
Is there a limit on how much I can draw from the reverse mortgage line of credit?
In the first 12 months: 60% of the principal limit (with exceptions for mandatory obligations). After 12 months: the full available line of credit balance.