In this article, you will learn:

  • Differences between jumbo 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?

While the HUD reverse mortgages are insured by the Federal Housing Administration (FHA) through its Home Equity Conversion Mortgage (HECM) program, there is also a rising number of Non-FHA reverse mortgages known as proprietary or jumbo reverse mortgages.

Among those Non-FHA reverse mortgages, the programs offering loan amounts higher than the FHA’s lending limit are typically called “jumbos.”  Like high dollar or jumbo programs in the forward mortgage market, reverse mortgage jumbos typically extend more borrowing potential to homeowners in that their lending limits exceed the current $1,089,300 lending limit set by FHA.

Jumbo reverse mortgages are available to qualifying homeowners with higher home values than can be served with the average HECM loan amount.  Many jumbo reverse mortgages are held by homeowners in California and other areas where home values tend to trend higher than the national average.

ARLO teaching jumbo reverse mortgages

Differences between Jumbo and FHA-insured reverse mortgages

Several lenders are offering jumbo reverse mortgages, and their specific elements vary.  Jumbo reverse mortgages are proprietary loans, meaning they do not need to adhere to Department of Housing and Urban Development program rules.

Some private reverse mortgage programs offer features that the FHA-insured Home Equity Conversion Mortgage (HECM) product does not.

These might include:

  • A minimum borrower age that is below the HECM minimum age of 62 (when state lending laws allow)
  • The ability to borrow using a Non-FHA-approved condo unit as collateral
  • The ability to take out the full amount of a lump sum payment at closing with fewer restrictions than under the HECM program

Another significant difference is that jumbo reverse mortgages have no mortgage insurance premiums, as this cost applies only to FHA-insured loans.

In most respects, however, jumbo reverse mortgages are very similar to HECMs.  Jumbo programs typically require reverse mortgage counseling, they may offer different disbursement options such as lump sum and a jumbo line of credit option, and they allow borrowers to tap into their home equity while they live in the home.

Jumbo VS HECM Product Comparison

Compare FeaturesJumbo Reverse MortgageHECM Reverse Mortgage
Borrower Minimum Age5562
Maximum Lending Limit$4,000,000$1,089,300
Eligible PropertiesSingle Family (SRF), FNMA warrantable Condo, Townhome, 1-4 Units.Single Family (SRF), HUD Approved Condo, Townhome, 1-4 Units.
Lump Sum100%Limited*
Line of Credit 10 Year Draw Period Lifetime
Line of Credit Growth RateLimited to 7 YearsLifetime
Tenure Payment Plan NoYes
Low/No Closing CostsYesNo
Younger Spouse ProtectionNoYes
Use for Home PurchaseYesYes
*HECM initial lump sum limits at loan closing, and within the first 12 months of closing, cannot exceed the greater of 60% of the Principal Limit, or, Mandatory obligations plus 10% of the Principal Limit. Jumbo loans may take a 100% lump sum disbursement.

Key Benefits

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 $1,089,300.  The exact percentages and figures will vary depending on several factors, including interest rates, borrowers’ ages, and home value.  

There will be times when homes valued slightly above the HUD limit will still benefit from the HECM program.  However, many jumbos are available with a lending limit of $4 million or more — a significant increase over the HECM lending limit of ​​$1,089,300.

Jumbo Reverse Mortgage Loan-to-values (LTV)

Borrower AgeLoan-to-valueLoan-to-value
Rate 9.625%9.740% & 10.490%
LTV Tables as of: 09/07/2023
Available Payout: Lump Sum
*Divide your home value by the LTV percentage to calculate your loan amount.
E.g., $2,000,000 value, age 70 = 35.6% LTV or $712,000 loan amount.

Jumbo Reverse Mortgage Rates

Fixed RateAdjustable RateLending Limit
9.625% (10.139% APR)11.885% (6.625 Margin)$4,000,000
9.740% (10.268% APR)12.010% (6.750 Margin)$4,000,000
10.490% (11.088% APR)12.135% (6.875 Margin)$4,000,000
Fixed Rate Payment Options: Lump Sum
Jumbo APR Illustration: Assumes $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

Risks and Rewards

For those considering a jumbo reverse mortgage, there are some pros and cons – most of which apply to all reverse mortgages.

Jumbo reverse mortgage rewards:
  • Borrower protections. Jumbo reverse mortgages typically carry borrower protections similar to those offered under the HECM program, such as the non-recourse feature, which means the borrower will not owe more to repay the loan than the home’s value at the time of sale.  Many jumbos offer non-borrowing spouse protections, as well.  However, it’s important to ask the lender about the specific borrower protections offered since private loans are not subject to the same protections required by FHA.
  • Access to loan proceeds.  While HECM loans restrict how much loan proceeds can be accessed upfront, jumbos do not have these same requirements and often allow immediate access to the full loan proceeds, depending on the loan terms.
  • Higher loan amounts.  Jumbo reverse mortgages allow qualifying borrowers to access their home value.  At the same time, they remain in the home — a key benefit for those who have enjoyed significant home appreciation over time but may be retired and on a fixed income.
Jumbo reverse mortgage risks
  • Lack of FHA insurance. Reverse mortgage jumbos are still non-recourse loans, but since FHA does not insure them, they do not carry all the same borrower projections that HECMs do.  It’s important to consult with trusted advisors and understand the loan terms and protections offered by your lender.
  • Impact on heirs’ inheritance.  Like all reverse mortgages, jumbos allow borrowers to access their home equity while they remain in the home.  By accessing and using this equity, borrowers will pass less equity on to their heirs than they would without the reverse mortgage.  However, it’s important to note that if the borrower passes away, any equity that remains after the loan is paid off can be passed on to the designated heirs.

History and Current Market Outlook

Like all mortgage products, the jumbo lending environment changes based on many factors.  Historically, there were many Non-FHA reverse mortgages with different rates and terms.

After the housing crash in 2008, most jumbos disappeared from the market.  Several jumbo products were launched based on low interest rates and changes to the FHA lending limit in recent years, offering various rates, terms, and features.

Suppose you are interested in a jumbo reverse mortgage.  In that case, it’s important to ask about the terms offered by your lender, such as the amount that can be borrowed, how proceeds can be obtained, and the types of protections regarding non-borrowing spouses (if applicable).

Top FAQs


What is a jumbo reverse mortgage?

The jumbo reverse mortgage is a particular type of loan that offers larger loan amounts than the federally insured HECM.  Where federally insured HECM loans stop considering home values over the HUD lending limit of $1,089,300, a jumbo reverse mortgage will consider home values up to $10 million.

What lenders offer jumbo reverse mortgages?

Many lenders and brokers throughout the US offer jumbo loan options.  At All Reverse Mortgage Inc., we offer a multitude of HECM, Jumbo & proprietary options to suit your individual needs.

What are the interest rates on Jumbo Reverse mortgages?

All loan types, including Jumbo Reverse Mortgages, are subject to market fluctuations and can change anytime without notice.  You should check our daily rate sheet to check current pricing on any given day.

How much can you get from a jumbo reverse mortgage?

The percentage of your home’s value is available based on the youngest borrower’s age and current interest rate environment.  Generally, the older you are, the more you will receive, as these loans are based on actuarial tables.

Can you get a Jumbo reverse mortgage line of credit?

Yes.  There are two exciting expansions on jumbo products in 2023, including larger loan limits and the ability to utilize available proceeds as an open line of credit option.  (Previously, only a single lump sum disbursement was permitted on jumbo loans).

What is the difference between jumbo and proprietary loans?

“Jumbo” is a reference to a “large loan amount.” Where jumbo reverse mortgages are proprietary by nature, proprietary reverse mortgages are not necessarily jumbo.  Some proprietary reverse mortgages are offered to home values as low as $450,000.  In contrast, Jumbo programs usually benefit those high-valued homes more than the HUD lending limit of $1,089,300.

Additional Resources:

Read my article published at, “The Evolution Of Jumbo Reverse Mortgages.”