Reverse Mortgage in California
Understand how reverse mortgages work for California homeowners, including laws, lenders, and jumbo reverse options.
What Is a Reverse Mortgage?
A reverse mortgage allows homeowners aged 62 or older to convert a portion of their home equity into tax-free income without having to sell their home or make monthly mortgage payments. In California, most reverse mortgages are federally backed HECM loans, regulated by both federal and state laws.
California Laws for Reverse Mortgages
California has specific consumer protections for seniors considering a reverse mortgage:
- Mandatory Counseling: Homeowners must complete a counseling session with a HUD-approved counselor before applying.
- Cooling-Off Period: Lenders are required to wait 7 days after counseling before the borrower can sign a loan application.
- Disclosures: California law requires lenders to provide a detailed disclosure explaining loan terms and costs, including the Total Annual Loan Cost (TALC).
- Non-Borrowing Spouse Protections: If the spouse is not on the loan, they may still be allowed to remain in the home after the borrower’s death, depending on eligibility.
Reverse Mortgage Lenders in California
California has a large number of HUD-approved reverse mortgage lenders. Some of the most well-known and active lenders in the state include:
- American Advisors Group (AAG) – based in Orange, CA
- Mutual of Omaha Mortgage – headquartered in San Diego, CA
- Liberty Reverse Mortgage – based in Rancho Cordova, CA
- Fairway Independent Mortgage – branches across California
All lenders must be licensed with the California Department of Financial Protection and Innovation (DFPI) and comply with federal HECM requirements.
Jumbo Reverse Mortgages in California
Jumbo reverse mortgages, also called proprietary reverse mortgages, are designed for homes that exceed the FHA lending limit of $1,149,825 (as of 2024). These loans are not insured by the FHA and are typically offered by private lenders. Features of jumbo reverse mortgages include:
- Higher borrowing limits – often up to $4 million or more
- No mortgage insurance premiums
- Flexible disbursement options (lump sum, line of credit, etc.)
- Available for luxury homes and high-value properties
California’s high property values, especially in areas like Los Angeles, San Diego, and the Bay Area, make jumbo reverse mortgages a popular option for many seniors.
Final Thoughts
If you're a California homeowner age 62 or older, a reverse mortgage may offer financial flexibility in retirement. However, it's essential to understand the legal obligations, fees, and long-term impact on your estate. Always work with a licensed lender and speak to a HUD-approved counselor before moving forward.