What Is Proprietary Reverse Mortgage and How Is It Different From HECM?

According to HUD, HECM is the FHA-insured reverse mortgage program, which means any proprietary reverse mortgage is outside that insurance structure and must be evaluated on its own terms.

Compare the two paths: HECM vs proprietary. FHA program reference: HUD.gov HECM. CFPB overview: CFPB reverse mortgage.

Why proprietary exists

• Higher values where the HECM maximum claim amount caps eligible value—HECM lending limit
• Borrowers who fit private age guidelines—sometimes from 55—verify current programs
• Product features investors want to offer competitively

HECM mortgage insurance vs proprietary

HECM includes FHA mortgage insurance premiums that fund program protections—HECM MIP. Proprietary loans do not use that same FHA MIP structure.

Jumbo is usually proprietary

Read jumbo reverse mortgage for high-value scenarios.

How to choose responsibly

Demand side-by-side illustrations and a clear explanation of tradeoffs—questions to ask.

In my experience working with homeowners in Palm Springs, proprietary options can be excellent fits when HECM caps limit flexibility, but only after a full side-by-side. A client I worked with in Chandler recently told me they felt immediate relief once we compared actual line items and not just ad language. What I find in practice is very different from what most people expect: the right choice usually comes from transparency, not brand familiarity.

CFPB consumer guidance consistently reminds borrowers to compare loan terms and costs carefully, which is even more important when evaluating private proprietary products versus standardized HECM rules.

Frequently asked questions

Is proprietary riskier?

Risk is not only “FHA vs not”—read protections, servicing reputation, and your note.

Do proprietary loans require HECM counseling?

HECM counseling is specific to HECM; proprietary programs set their own requirements.

Can I get a fixed rate?

Some programs emphasize fixed lump sums—compare to adjustable LOC structures.

Are payouts identical?

No—LOC growth rules, draws, and plan types vary by investor.

Next steps

Use the free reverse mortgage calculator and take the free readiness assessment. For HECM vs proprietary modeling, use the contact page or about page.

This material is not from HUD or FHA and has not been approved by HUD or any government agency. All reverse mortgage loans are subject to credit and property approval.