2025 Jumbo Reverse Mortgage Guide: Top Lenders, Rates & Loan Limits
Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 20 years to reverse mortgages exclusively. (License: NMLS# 14040) |
All Reverse Mortgage's editing process includes rigorous fact-checking led by industry experts to ensure all content is accurate and current. This article has been reviewed, edited, and fact-checked by Cliff Auerswald, President and co-creator of ARLO™. (License: NMLS# 14041) |
As we enter 2025, the landscape of reverse mortgages continues to evolve, with jumbo reverse mortgages, also known as proprietary or private reverse mortgages, emerging as a significant component for homeowners with high-value or non-conforming/non-FHA insurable properties.
In this article, we will dissect the critical differences between jumbo and FHA-insured reverse mortgages, clarifying why and when a jumbo reverse mortgage could be the right choice for you. We will also dive into the key benefits alongside a balanced discussion of these loans’ potential risks and rewards.
Whether you are a homeowner, a financial advisor, or simply interested in the latest trends in mortgage finance, this article will equip you with the knowledge about the lenders, rates, and loan limits pertinent to 2025’s reverse mortgages.
In this article, you will learn:
- Differences between jumbo/proprietary reverse mortgages (hereafter referred to solely as jumbo reverse mortgages) and FHA-insured reverse mortgages
- Key benefits of a jumbo reverse mortgage
- Risks and rewards of a jumbo reverse mortgage
- History and current market outlook for jumbo reverse mortgages
What is a Jumbo Reverse Mortgage?
A jumbo reverse mortgage is a type of reverse mortgage for homeowners with high-value properties or properties that may not conform to HUD/FHA insurance requirements. While traditional reverse mortgages are insured by the Federal Housing Administration (FHA, which is a division of the Department of Housing and Urban Development or HUD, so FHA and HUD will be used interchangeably) through its Home Equity Conversion Mortgage (HECM) program, jumbo reverse mortgages are not.
Instead, they are known as proprietary or Non-FHA reverse mortgages. The jumbo programs also have their own underwriting requirements, so that does not mean that any property that cannot be used for FHA financing can be used for the jumbo programs. The private programs set their own underwriting parameters, and therefore, they will accept many property, borrower, and loan scenarios that the FHA underwriting requirements may not accept.
Jumbo reverse mortgages offer loan amounts much higher than the FHA. The FHA program limits borrowers to a percentage of the HUD maximum lending limit or the appraised value, whichever is less, and the current lending limit is $1,209,750. Based on interest rates and the borrowers’ ages, with the FHA program, the actual loan amount maximum for borrowers is much less than the current maximum loan amount of $4,000,000 for jumbo programs. This means homeowners with more valuable homes can borrow more money than they could with a standard HECM loan that would be capped at a percentage of $1,209,750, even for properties with values that far exceed the FHA limit of $1,209,750.
These loans are designed for homeowners with higher home values, such as those in states like California, where property prices often exceed the national average. If your home is worth more than what an average HECM loan accommodates, a jumbo reverse mortgage could be a suitable option for you. However, we will also discuss some situations where the jumbo program might work best for borrowers with properties valued at or below the HECM limit due to borrower or property parameters.
Primary Advantage of a Jumbo Reverse Mortgage
The key benefit of a jumbo reverse mortgage is the ability to maximize loan proceeds for a home valued higher than the HUD maximum of $1,209,750. The exact percentages and figures will vary depending on several factors, including interest rates, borrowers’ ages, and home value.
Sometimes, homes valued slightly above the HUD limit will still benefit from the HECM program. However, many jumbos are available with loan amounts of $4 million or more (property values sometimes approaching $10,000,000) — a significant increase over the HECM lending limit of $1,209,750.
Understanding Jumbo Reverse Mortgages
Several lenders offer jumbo reverse mortgages, and the details can vary between lenders. These are proprietary loans, meaning they do not need to follow the rules of the Department of Housing and Urban Development (HUD).
Jumbo reverse mortgages can offer unique features that FHA-insured Home Equity Conversion Mortgages (HECM) do not, such as:
- Allowing borrowers who are younger than the HECM minimum age of 62 (where state laws permit)
- Enabling the use of a Non-FHA-approved condo unit as collateral
- Providing the option to take out the full loan amount as a lump sum at closing with fewer restrictions than HECMs
A key difference is that jumbo reverse mortgages do not require mortgage insurance premiums, which are a cost associated only with FHA-insured loans.
Despite these differences, jumbo reverse mortgages are similar to HECMs in many ways. They typically require reverse mortgage counseling and may offer various disbursement options, like a lump sum or a line of credit. These loans allow borrowers to access their home equity while continuing to live in their homes.
2025 Jumbo Reverse Mortgage Loan-To-Value Chart (LTV)
Borrower Age | Loan-to-value (8.990 & 9.250%) | Loan-to-value (Adjustable) | Loan-to-value (8.490%) |
---|---|---|---|
55 | 31.8% | 31.8% | 26.8% |
56 | 32.1% | 32.1% | 27.1% |
57 | 32.3% | 32.3% | 27.3% |
58 | 32.6% | 32.6% | 27.6% |
59 | 32.9% | 32.9% | 27.9% |
60 | 33.3% | 33.3% | 28.3% |
61 | 33.6% | 33.6% | 28.6% |
62 | 33.8% | 33.8% | 28.8% |
63 | 34.2% | 34.2% | 29.2% |
64 | 34.6% | 34.6% | 29.6% |
65 | 35.0% | 35.0% | 30.0% |
66 | 35.6% | 35.6% | 30.6% |
67 | 36.2% | 36.2% | 31.2% |
68 | 36.8% | 36.8% | 31.8% |
69 | 37.4% | 37.4% | 32.4% |
70 | 38.2% | 38.2% | 33.2% |
71 | 39.0% | 39.0% | 34.0% |
72 | 39.8% | 39.8% | 34.8% |
73 | 40.6% | 40.6% | 35.6% |
74 | 41.5% | 41.5% | 36.5% |
75 | 42.5% | 42.5% | 37.5% |
76 | 43.5% | 43.5% | 38.5% |
77 | 44.5% | 44.5% | 39.5% |
78 | 45.2% | 45.2% | 40.2% |
79 | 46.3% | 46.3% | 41.3% |
80 | 47.4% | 47.4% | 42.4% |
81 | 48.6% | 48.6% | 43.6% |
82 | 49.8% | 49.8% | 44.8% |
83 | 51.2% | 51.2% | 46.2% |
84 | 51.9% | 51.9% | 46.9% |
85 | 52.8% | 52.8% | 47.8% |
86 | 53.3% | 53.3% | 48.3% |
87 | 53.7% | 53.7% | 48.7% |
88 | 53.8% | 53.8% | 48.8% |
89 - 100 | 53.9% | 53.9% | 48.9% |
Jumbo Reverse Mortgage Rates
Fixed Rate | Adjustable Rate | Lending Limit |
---|---|---|
8.490% (8.949% APR) | 10.345% (6.125 Margin) | $4,000,000 |
8.990% (9.491% APR) | 10.470% (6.250 Margin) | $4,000,000 |
9.250% (9.774% APR) | 10.595% (6.375 Margin) | $4,000,000 |
Jumbo APR Illustration: Scenario is for a 70 year old borrower in California with a $1,000,000 loan amount, includes standard 3rd party closing costs.
Adjustable-Rate Payment Options: Lump Sum or Line of Credit
Index: 12-Mo. CMT
Lifetime Cap: 5% Over Start Rate
Pros & Cons of Jumbo Reverse Mortgages
For those considering a jumbo reverse mortgage, there are some pros and cons – most of which apply to all reverse mortgage programs, private or FHA-insured.
History and Current Market Outlook
The jumbo reverse mortgage market has evolved and has been influenced by various factors. After the 2008 housing crash, many jumbo reverse mortgage products disappeared. However, several new jumbo products have been introduced in recent years, offering different rates, terms, and features, thanks to low interest rates and changes to the FHA lending limit.
If you are considering a jumbo reverse mortgage, comparing lenders about the specific terms they offer is essential. Important details include the maximum amount you can borrow, how you will receive the loan proceeds, and the protections available for non-borrowing spouses, if applicable. Understanding these factors will help you make an informed decision.
Jumbo FAQs
What is a jumbo reverse mortgage?
What lenders offer jumbo reverse mortgages?
What are the current interest rates on jumbo reverse mortgages?
Interest rates as of 12/17/2024 on jumbo reverse mortgages are as follows:
- Fixed Rates: Range from 8.490% (8.949% APR) to 9.250% (9.774% APR)
- Adjustable Rates: Range from 10.345% (6.125 Margin) to 10.595% (6.375 Margin)
All these rates come with a lending limit of $4,000,000.
How much can you get from a jumbo reverse mortgage?
Can you get a jumbo reverse mortgage line of credit?
What is the difference between jumbo and proprietary loans?
How long does it take to take out a jumbo reverse mortgage?
Will the lender pay the property tax and insurance with a jumbo reverse mortgage?
With a jumbo reverse mortgage, are the beneficiaries liable if the property is “underwater?”
Can you have more than one jumbo reverse mortgage?
Are jumbo reverse mortgage interest rates fixed for the life of the loan?
Can I rent rooms privately, with a rental company, or Airbnb if we have a jumbo reverse mortgage?
Additional Resources:
- Read my article published at Forbes.com, “The Evolution Of Jumbo Reverse Mortgages.”
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