Reverse Mortgage Alternatives: 14 Options Compared, With Costs and Tax

By Hans Goldstein, EA · Updated October 15, 2026

All 14 reverse mortgage alternatives in one table

Read across a row to see what each one does. Costs vary by lender and state, so treat them as the questions to ask, not quotes. Federal figures and rates were checked October 15, 2026. The comparison starts with the reverse mortgage itself so you can see what you are measuring against.

Why people look for a reverse mortgage alternative

A reverse mortgage (the federal HECM loan) lets a homeowner 62 or older borrow against the home with no required monthly payment. It is a real tool, and for some people staying in a paid-off home for many years it is the right one. It stops working, or stops being the best fit, for these common reasons:

• You may move. The loan comes due when the home is no longer your principal residence, or when you are away more than 12 consecutive months for illness (24 CFR 206.27, checked October 15, 2026). Assisted living or memory care ends it.
• The upfront cost is set on the home, not on what you draw. HUD charges an upfront mortgage insurance premium of 2% of the maximum claim amount (the lesser of the appraised value or the federal limit), and the lender can add an origination fee of up to $6,000 (24 CFR 206.31, checked October 15, 2026). On a $900,000 home that is $18,000 plus up to $6,000, before closing costs, even if you only need $150,000.
• The balance grows. Interest and a 0.5% yearly insurance premium are added each month, so what is left for you or your heirs shrinks. The loan is non-recourse for a federally insured HECM, so nobody owes more than the home is worth.
• The size limit. The 2026 federal limit used to size a HECM is $1,249,125 (HUD, checked October 15, 2026). On a $2 million home the loan cannot reach full value, and the amount also depends on your age and the rate.
• A spouse who is not on the loan, or a home you want to leave to your children. Both change the math.
• You would rather be done with the house. You want to downsize, move near family, or stop being a landlord or a gardener.

This page does not teach how a HECM works. It compares the other roads, and shows the one most people have not heard of. For the federal basics, see the CFPB reverse mortgage guide and talk to a HUD-approved housing counselor; HECM counseling is required.

If you want to stay in the home

12Home equity loan or HELOC

A home equity loan is a second mortgage paid out as a lump sum with a fixed rate and a fixed payment. A HELOC is a line of credit with a variable rate: you draw as needed, usually pay interest only for a draw period, then repay. Both keep the title in your name and leave your heirs the house.

• Fits when: you plan to stay, have steady income and decent credit, and need a smaller amount or a bridge of a few years.
• Cost: a rate tied to prime for a HELOC (prime was 7.00% on October 13, 2026, and lenders add a margin) plus fees and closing costs that vary by lender. At an illustrative 8.0%, borrowing $150,000 interest-only costs $1,000 a month.
• Watch for: a payment you must keep making on a fixed income, a rate that can rise, and a lender that can freeze or cut the line. Miss payments and the home is the collateral.

Reverse mortgage vs home equity loan: the short comparison

If someone asks you to choose between a reverse mortgage and a HELOC, the honest answer starts with one question: can you carry the payment for ten years if rates rise? If yes, the HELOC or home equity loan almost always costs less. If no, the reverse mortgage is the only one in this pair that works, and the alternatives below matter more.

3Cash-out refinance

You replace your mortgage with a bigger one and keep the difference. That reprices every dollar you owe at today’s rate. The 30-year fixed rate was 7.40% and the 15-year was 6.71% for the week of October 15, 2026 (Freddie Mac, via FRED).

• Fits when: your current mortgage rate is above today’s rate, or you have no mortgage and want one fixed payment.
• Cost: closing costs plus the new rate on the whole balance. Example: $200,000 left at 3.5% costs $898 a month (30 years). Refinance to $350,000 at 7.40% and the payment is $2,423, which is $1,525 more a month to get $150,000 of cash. A HELOC on only the $150,000 at an illustrative 8.0% interest-only would cost $1,000 and leave the 3.5% loan alone.
• Watch for: giving up a low rate. When rates are high, a cash-out refinance is usually the most expensive way to borrow if you already hold a cheap mortgage.

9Rent a room, an ADU or the whole house

Income without a loan. A roommate, a backyard unit or a rented-out house can cover a gap of a few hundred to a few thousand dollars a month. Check local zoning and your insurer before you build or list.

• Fits when: you like the home, can handle a tenant (or hire a manager), and need monthly income, not a lump sum.
• Cost: landlord insurance, repairs, vacancy, and income tax on the rent. A unit costs money to build, so price it before you count on the rent.
• Watch for: rent is taxable income, and renting the whole house for years before you sell can cost you part of the home sale exclusion, because the home must be your main home for 2 of the last 5 years (IRC §121, IRS Pub. 523). Depreciation taken on a rented portion is taxed when you sell.

10Senior property tax postponement and relief programs

If the property tax bill is the real squeeze, a state or county program may let you postpone it. These do not put cash in your pocket. They stop the bill from forcing a sale, and the postponed tax becomes a lien you repay when you sell, move or die. Here are four programs checked against official sources on October 15, 2026. Income limits and rates change each year, so confirm with the agency before you rely on any of them.

Most other states have an exemption, a freeze or a deferral for older owners. Ask your county assessor or tax collector, and run your age and income through BenefitsCheckUp and the Eldercare Locator, which also list home repair and utility help.

• Fits when: your equity is large, your income is modest, and the tax bill is what threatens the home.
• Cost: interest in some states and a lien in all; the lien comes out of the sale or the estate.
• Watch for: it does not raise cash for care or living costs, and some programs expect you to keep insurance and stay current on everything else.

California note for movers. If you are 55 or older and sell, Proposition 19 lets you carry your current property tax base to a replacement home anywhere in California, up to three times, if you buy within 2 years of the sale. File within 3 years of the purchase (Board of Equalization, checked October 15, 2026). It is one of the better reasons for a California senior to downsize rather than borrow.

8A family loan or a sale to a relative

A child or relative lends you money, or buys the home. It can be the cheapest and most flexible route, and the easiest to get wrong.

• Fits when: the amount is modest, everyone agrees in writing, and a relative wants the house.
• Cost: legal drafting. A loan should carry at least the IRS applicable federal rate (AFR) or the below-market loan rules in IRC §7872 apply. Any gift above $19,000 per person in 2026 is reportable (Rev. Proc. 2025-32).
• Watch for: selling to a child below market value is part gift. A gifted house keeps your old basis for the child (IRC §1015), while a house inherited at death gets a stepped-up basis (IRC §1014), so giving the house now can cost your family tax later. And transfers within 60 months of a Medicaid application can trigger a penalty period.

11Home equity sharing (home equity investments)

A company gives you cash now with no monthly payment, and in return gets a share of the home’s future value, or of its change in value, when you sell or at the end of a set term. It is not a loan, so there is no payment, and it also is not cheap. Terms differ a lot, so read the formula in the contract before anything else.

Arithmetic on hypothetical terms, not any company’s offer: you receive $90,000 against a $900,000 home, and the investor takes 25% of the future value at the end of 10 years. If the home grows 3% a year it is worth $1,209,525, and the investor’s 25% is $302,381. You paid $302,381 for $90,000 you received, which works out to about 12.9% a year. If the home does not grow, you may pay less; if it grows faster, more.

• Fits when: you must stay, cannot carry a payment, and have no better option. Treat it as a last resort for a short bridge.
• Cost: a share of future value plus fees, which can exceed the cost of a reverse mortgage over ten years. Ask for the worked payoff at 0%, 3% and 6% growth.
• Watch for: a term that ends in a forced sale or refinance, caps and floors that favor the investor, and an effect on what your heirs keep.

12Proprietary (jumbo) reverse mortgages

If your home is worth more than the $1,249,125 federal limit, a private lender may offer a larger reverse mortgage on its own terms. There is no federal insurance and fewer protections, so rates and fees can be higher, and the rules on spouses and repayment come from the lender’s contract. It can fit a high-value home where you plan to stay for a long time and want no payment. Ask for the same total-cost sheet you would ask of any lender, and compare it with selling.

14Keep the home and use other money

If you have an IRA, a brokerage account or a CD ladder, it may cost less to spend that and let the home ride. At death your heirs take the home at its value then (IRC §1014), and the gain can disappear. The cost is the tax on what you sell or withdraw, so compare it with the cost of borrowing before choosing.

If you are willing to sell

Selling turns the home into cash without a loan balance, but the tax can be large on a home bought long ago. A married couple excludes the first $500,000 of gain and a single owner $250,000 (IRC §121). Gain above that is taxed at up to 20% federal, plus the 3.8% net investment income tax (IRC §1411) and state tax, and a big one-year gain can raise your Medicare premiums (IRMAA). Check the real figure with the seller net sheet after tax before you decide.

4Sell and downsize

Sell, buy a smaller or cheaper home, and keep the difference. It is the oldest alternative and often the simplest: less upkeep, no loan balance, and cash for whatever comes next.

• Fits when: you want less house, a lump sum, and are fine moving.
• Cost: about 6% of the price in selling costs (a common planning figure, which varies by area), moving costs, and tax on any gain above your exclusion.
• Watch for: a one-year tax bite on a large gain, and property tax that resets on the new home in many states. In California, age 55+ buyers can carry their base year value (see the Proposition 19 note above). If your gain is under the exclusion, see the home sale exclusion page.

5Sell and rent

Sell, invest the proceeds, and rent. You swap a home that costs you upkeep for rent you can plan. Many people who search “sell my house and rent” want to know if the math works, and it depends on the rent against what the proceeds can safely produce.

• Fits when: you want to be done with the house and the invested proceeds can pay the rent for decades.
• Cost: selling costs, tax on the gain, then rent that usually rises every year.
• Watch for: rent growing faster than your income, and a one-year tax bill on a big gain.

6Sale-leaseback: sell the house and rent it back

You sell to an investor or a company and sign a lease so you stay. People search “sell my house and rent it back” when they want the cash and do not want to move. It works for some people and costs most.

• Fits when: you need to stay and have no way to borrow, and the lease is long enough to be safe.
• Cost: the buyer needs a return, so the price is usually below what an open-market sale would bring and the rent is set to repay them. Taxes are the same as a sale.
• Watch for: the lease term (you could be asked to leave), rent increases, repairs and who pays what, and the loss of the home for your heirs. Get an attorney to read it, and compare the net with a plain sale and with an installment sale.

7Sell with an installment sale: buyer pays in full, you take payments over years

This is the option most reverse mortgage guides never mention. The buyer pays the full price in cash at closing, so you are not the bank and take no risk on the buyer. At closing, the proceeds go into an annuity that pays you on a schedule you pick, and under IRC §453 the gain is taxed as you receive it instead of all in one year. It has to be written into the sale contract before closing.

Why it matters if you are comparing a reverse mortgage: a reverse mortgage gives you cash you owe back with interest. An installment sale gives you income from your own money, with a smaller tax bill each year, which can mean you net more after tax on a large gain. Because payments are fixed and arrive for years, it can also cover a monthly care bill: see paying for long-term care with your home.

• Fits when: you are willing to sell, the gain is large (the exclusion does not cover it), and you want steady income more than a lump sum.
• Cost: a $5,000 written analysis if you hire us; the first 15-minute scope call is free. The annuity pays the brokerage firm a one-time commission built into its pricing, not a separate fee.
• Watch for: the payments are fixed and cannot be sped up, payments still owed at death are income to heirs without a step-up (IRC §691), and Medicaid counts a payout as income. Your home is personal-use property, which is exempt from the section 453A interest charge.

If care is the real problem

13Medicaid and long-term care planning

If a nursing home or memory care is likely, the order of every step changes. Medicaid looks back 60 months at transfers for less than fair value, and a penalty period can follow (42 U.S.C. §1396p). Your home may be exempt in some circumstances but there are limits on home equity, and an estate recovery claim can follow after death. A payout from an installment sale counts as income. This is the one area where you should see an elder law attorney before doing anything, including taking a reverse mortgage.

Read these two next: how to pay for a nursing home or memory care with your house and selling a house in a trust to pay for care. Both go step by step through sell, rent, borrow or Medicaid, with the tax on each.

What $150,000 costs three ways, dated October 15, 2026

A $900,000 home, $150,000 needed. All three figures below are illustrative, built from the dated inputs shown, and are not quotes. Rates use the Federal Reserve prime rate and the Freddie Mac survey. Lender margins and closing costs differ.

Source dates: prime 7.00% (October 13, 2026, FRED); 30-year fixed 7.40% (week of October 15, 2026, Freddie Mac via FRED); HECM fee rules (24 CFR 206.31 and 206.105). The 8.0% HELOC rate is an assumption for the example, not a lender quote.

Worked example: a $2.0 million home, dated October 14, 2026

A married couple in California, both 74. They bought their home in 1988 for $310,000 and have put in $40,000 of improvements, so their basis is $350,000. They sell for $2,000,000 with $120,000 of selling costs. They use the $500,000 exclusion. The taxable gain is $1,030,000. Other income is $90,000 a year from Social Security and a pension. A reverse mortgage on this home would be capped by the $1,249,125 federal limit, not the $2.0 million value.

The payout stays ahead because less tax is paid in year one, so more money keeps working. The gap is a model, not a promise: it grows or shrinks with the payout rate, the number of years and your other income. If the gain were under $500,000 there would be no federal tax to manage and the table would not apply.

Run on October 14, 2026 with the Goldstein & Co. engine: 2026 federal brackets, the 3.8% net investment income tax and AMT (IRS Rev. Proc. 2025-32), and 2026 state brackets. The 5.0% payout rate is an assumption, not a quote. After-tax money at the end assumes nothing is spent and both paths earn 5.0%, taxed every year. These are estimates, not a quote.

When this does not fit

• You want to stay in the house. If you plan to live there ten more years, a sale is the wrong answer.
• Your heirs can take the house with a step-up. At death the basis resets, so the gain can vanish. If you can live on other money, holding can beat selling.
• You need most of the money at once. Payments are fixed.
• Your gain is under the exclusion. Then you only need a good sale.
• Medicaid is close. See the care section above.

Mistakes to avoid

1. Choosing by monthly payment alone. Ask every lender for the total cost over 5, 10 and 15 years and the net cash you receive.
2. Signing under a deadline. Anyone who says “sign by tomorrow or lose the buyer” is selling, not advising. Take it to a counselor, an attorney or your CPA first.
3. Listing before the structure is decided. An installment sale has to be written into the contract before closing. After the deed is recorded the choice is gone.
4. Gifting the house to the kids. It hands them your old basis (losing the step-up), can trip the Medicaid look-back, and exposes the house to their creditors and divorces.
5. Counting on a HELOC you do not yet have. A lender can freeze or cut the line when you need it most, so open one while you are healthy and employed.
6. Ignoring the spouse. If one spouse is not on a reverse mortgage, protections are narrower than most people think.
7. Forgetting taxes and insurance. A reverse mortgage still requires them, and falling behind can make the loan due.
8. Comparing a gross price to a net. Selling costs and tax change the answer, so compare nets.
9. Not asking about state programs. A property tax postponement can solve the actual problem for free.

What to do this week

1. Write down what you need: a lump sum or a monthly amount, and for how many years.
2. Find your basis: the purchase price plus improvements. Old closing papers and county records have it.
3. Run the numbers on the seller net sheet after tax and the structured sale calculator.
4. Price the borrowing options with two lenders using the same total-cost sheet, and ask a HUD-approved counselor about the reverse mortgage.
5. Talk to your CPA or an Enrolled Agent before you list the home. The first 15-minute scope call with Hans is free, and he will tell you straight when the answer is “do not sell.”

Related: forced-to-sell step-by-step guides, how seniors can owe $0 federal capital gains in 2026, how a structured installment sale works and every option compared side by side. For the technical tax detail, Big Sale Tax on California installment sales.

Frequently asked questions about reverse mortgage alternatives

What are the alternatives to a reverse mortgage for seniors?

The main alternatives are a home equity loan or HELOC, a cash-out refinance, selling and downsizing, selling and renting, a sale-leaseback, renting out a room or the house, senior property tax postponement, home equity sharing, a family loan or sale, and selling the home with the price paid out over years. The table on this page compares all 14 on cash now, monthly payment, staying in the home, what heirs keep, tax and cost.

What is the best alternative to a reverse mortgage?

It depends on whether you want to stay. If you stay and have steady income, a HELOC or home equity loan is usually the cheapest cash. If you will sell and your gain is above the home sale exclusion, an installment sale paid over years can leave you with more after tax. If you cannot carry any payment and want to stay, a reverse mortgage may still be the right tool.

What is a good alternative to a reverse mortgage for seniors?

For seniors with a large gain who are willing to sell, an installment sale turns the home into steady payments and spreads the tax on the gain across years. For seniors who want to stay, a smaller HELOC, renting part of the home, or a property tax postponement program is common. Neither fits everyone.

Reverse mortgage vs home equity loan: which is better?

A home equity loan has a fixed payment and costs less, but you need income and credit and must make the payment. A reverse mortgage has no required payment, but the balance grows with interest and insurance and you must live in the home. If you can carry the payment for ten years, the home equity loan is usually cheaper. If you cannot, the reverse mortgage is the one that works.

Reverse mortgage vs HELOC: which is better for a senior on a fixed income?

A HELOC needs a monthly payment and a variable rate that can rise, so it can be risky on a fixed income. A reverse mortgage needs no payment but costs more upfront and the balance grows. If you can afford the payment and plan to stay, a HELOC usually costs less for a smaller amount. A lender can also freeze or cut a HELOC.

HECM vs HELOC: what is the difference?

A HECM is the federally insured reverse mortgage for homeowners 62 and older. A HELOC is a revolving line of credit with a monthly payment. The HECM has no required payment and a growing balance, plus upfront insurance of 2% of the home value (up to the federal limit). The HELOC has a variable rate and a payment from day one.

Reverse mortgage vs selling the house: which is better?

A reverse mortgage is better if you want to live in the home for many more years and keep it for your heirs. Selling is better if you will move soon, want to stop a growing debt, or have a gain large enough that spreading the tax matters. If the sale is a large gain, ask about an installment sale paid over years.

Reverse mortgage vs downsizing: which is better?

Downsizing gives you a lump sum and a smaller home with no loan balance, but you pay selling costs and any tax over your exclusion. A reverse mortgage keeps you in the house but adds a growing balance. The better choice depends on whether you want to move. In California, buyers 55 and older can carry their property tax base to a replacement home.

Reverse mortgage vs cash-out refinance: what is the difference?

A cash-out refinance replaces your mortgage with a bigger one at today’s rate and needs a monthly payment. On October 15, 2026 the average 30-year fixed rate was 7.40% (Freddie Mac), so refinancing a cheap mortgage can raise your payment a lot. A reverse mortgage needs no payment but costs more upfront and adds a growing balance.

Can I sell my house and rent it back?

Yes. It is called a sale-leaseback. You sell to an investor or company and sign a lease to stay. The price is usually below an open-market sale because the buyer needs a return, the rent is set to give them one, and the lease can end. Taxes are the same as a sale. Compare the net with a plain sale and with an installment sale before you sign.

Is a sale-leaseback a good alternative to a reverse mortgage?

Rarely. It lets you stay and get cash with no loan, but you lose the home, usually take a lower price, and pay rent that can rise. It can make sense for a short bridge when no other option exists. Have an attorney read the lease and compare the net to a plain sale.

Can I defer property taxes as a senior?

Many states let older owners postpone property tax and repay it from the sale or the estate, with a lien. California’s program for 2026-27 allows household income up to $57,002 with at least 40% equity, and applications run from October 1, 2026 to February 10, 2027. Texas, Washington and Oregon have programs too. Check your county assessor for the rules where you live.

Is a home equity investment or shared appreciation agreement a good alternative?

Usually only as a last resort. You get cash and no payment, but the investor takes a share of the home’s future value, which can work out to a double-digit yearly cost. Ask for the payoff at 0%, 3% and 6% growth and compare it with a reverse mortgage and a sale.

What are AARP’s reverse mortgage alternatives?

AARP is a nonprofit, not a lender, and publishes its own guides. This page covers the same ground in one place: HELOC, home equity loan, cash-out refinance, downsizing, renting, sale-leaseback, home equity sharing, family help, tax postponement and an installment sale. Read AARP’s guide as a second opinion.

Is there an alternative to a reverse mortgage if my home is worth more than the limit?

Yes. The 2026 federal HECM limit is $1,249,125. On a more valuable home you can sell, downsize, or sell with a payout over years. Some lenders offer proprietary jumbo reverse mortgages with no federal insurance. Compare the costs in writing.

How can I get income from my home without a reverse mortgage?

Rent a room, an ADU or the whole house, take a HELOC if you qualify, or sell and invest the proceeds. An installment sale pays you monthly or yearly from an annuity funded at closing, on a schedule you pick.

Will I owe capital gains tax if I sell my home instead?

Only on gain above your exclusion: $250,000 single, $500,000 married filing jointly (IRC §121). Gain above that is taxed, and a payout over years can lower each year’s tax. Your CPA should confirm your basis.

Can I sell a house that has a reverse mortgage?

Yes. The sale pays off the reverse mortgage balance at closing, and you keep whatever is left. If the house sells for less than the balance, a federally insured HECM is non-recourse, so you or your heirs do not owe the shortfall. A title company will order a payoff figure from the servicer.

What happens to a reverse mortgage if you move to assisted living?

The balance becomes due and payable when the home is no longer your principal residence, or after more than 12 consecutive months away for illness, unless another borrower still lives there (24 CFR 206.27). The home is usually sold to repay it, and what is left over goes to you or your estate. Plan the sale or payoff before month 12.

My parent died and left a house with a reverse mortgage. What are the heirs’ options?

The loan becomes due when the last borrower dies. Heirs can sell and keep any equity, pay off the loan to keep the house (HUD rules generally let heirs pay the lesser of the balance or 95% of the appraised value; ask the servicer), refinance, or hand the house to the lender if it is worth less than the loan. Do not ignore the letters. The house gets a stepped-up basis at death, so a sale soon after often has little tax.

Is a reverse mortgage taxable, and does it affect Medicaid?

A reverse mortgage is a loan, so the money you receive is generally not taxable income. It usually does not count as income for Social Security or Medicare, but it can affect needs-tested benefits like Medicaid or SSI if you keep the cash. Interest is generally deductible only when it is actually paid, which is usually at payoff. A preparer can confirm what applies to you.

How do I get out of a reverse mortgage or cancel one?

You have three business days after closing to cancel a new reverse mortgage (12 CFR 1026.23). After that, the exits are to pay it off by sale or refinance, or to ask the servicer about a deed in lieu of foreclosure. Call the servicer, then see a HUD-approved counselor.

What does a reverse mortgage cost?

Expect an origination fee of up to $6,000, closing costs, an upfront mortgage insurance premium of 2% of the home value up to the federal limit, 0.5% a year in insurance, servicing fees and interest, all added to the balance. Counseling is required. Ask each lender for the total cost over 5, 10 and 15 years and the amount you net, and compare it with a sale.

What does a real analysis cost?

The first 15-minute scope call is free. A written analysis is $5,000. The calculators and this page are free.

What are my alternatives if I am under 62 and cannot get a reverse mortgage?

A federally insured reverse mortgage (the HECM) needs the borrower to be 62 or older. Under 62, the main options are a HELOC or home equity loan, a cash-out refinance, selling and downsizing, renting a room or the house, or a family loan.

My spouse is not on the reverse mortgage. What happens if I die first or go into care?

It depends on whether the spouse qualifies as an eligible non-borrowing spouse under HUD rules: generally married to the borrower when the loan closed and living in the home. An eligible spouse may be allowed to stay after the borrower dies, if conditions are met. A spouse who does not qualify may have to repay the loan or leave. Ask the servicer in writing before you sign.

Can we pay off a reverse mortgage and keep the house?

Yes. You can pay the loan off with savings, a new mortgage, or money from selling something else. Ask the servicer for a payoff letter. A refinance to a regular mortgage needs income and credit. A relative can help pay it off, but a gift to or from someone on Medicaid has other rules.

What if I cannot pay property taxes or insurance on a house with a reverse mortgage?

Failing to pay property tax, insurance or repairs can make the loan due, and it is the most common reason borrowers lose the home. Some lenders will set aside money in the loan for these, and some states and counties have property tax postponement programs for seniors. Ask early.

What are the pros and cons of reverse mortgage alternatives?

Every alternative trades something. A HELOC has a monthly payment and a variable rate. Downsizing has selling costs and moving. Renting has rent that can rise. A sale can create a tax bill. Keeping the house for the step-up needs other money to live on. A reverse mortgage has no payment but the debt grows.

What are the reverse mortgage payout options, and how do they compare with other ways to get the money?

A HECM can pay as a lump sum, a monthly amount for as long as you live in the home, a line of credit that grows, or a mix. Interest and fees are added to the balance in every case. The amount available depends on your age, the interest rate and the home value up to the HUD limit.

Is a reverse mortgage calculator accurate, and how do I compare it with selling?

A reverse mortgage calculator gives a rough number from your age, home value and an assumed rate. The real figure depends on the lender’s rate, fees and your age on the day of closing. Use any calculator for a ballpark, then ask the lender for a written quote with all costs, and compare it with the seller net sheet after tax.

Sources and dates

• 24 CFR §206.27, HECM mortgage provisions, due and payable, checked October 15, 2026
• 24 CFR §206.31, HECM origination fee limit (greater of $2,500 or 2% of the first $200,000 plus 1% above, capped at $6,000), checked October 15, 2026
• 24 CFR §206.105, HECM mortgage insurance premium (regulatory caps; HUD sets the current 2% upfront rate), checked October 15, 2026
• HUD FHA mortgage limits, HECM, calendar year 2026 ($1,249,125), checked October 15, 2026
• HUD-approved housing counselor search (HECM counseling is required), checked October 15, 2026
• Federal Reserve via FRED, bank prime loan rate: 7.00% on October 13, 2026, checked October 15, 2026
• Freddie Mac Primary Mortgage Market Survey via FRED: 30-year fixed 7.40% and 15-year fixed 6.71% for the week of October 15, 2026, checked October 15, 2026
• IRC §121, home sale exclusion ($250,000 single, $500,000 married filing jointly; 2 of the last 5 years), checked October 15, 2026
• IRC §453, installment method, checked October 15, 2026
• IRC §453A(b)(3), personal-use property exempt from the interest charge, checked October 15, 2026
• IRC §1014, basis of property acquired from a decedent, checked October 15, 2026
• IRC §1015, basis of property acquired by gift, checked October 15, 2026
• IRC §691, income in respect of a decedent, checked October 15, 2026
• IRC §7872, below-market loans, checked October 15, 2026
• 42 U.S.C. §1396p, Medicaid transfers, look-back and home equity, checked October 15, 2026
• IRS Rev. Proc. 2025-32, 2026 figures (gift exclusion $19,000 per person; estate and gift basic exclusion $15,000,000), checked October 15, 2026
• IRS Publication 523, Selling Your Home, checked October 15, 2026
• IRS applicable federal rates (minimum interest on family loans), checked October 15, 2026
• California State Controller, Property Tax Postponement 2026-27 (income limit $57,002, 40% equity; filing Oct 1, 2026 to Feb 10, 2027), checked October 15, 2026
• Texas Tax Code §33.06, deferral for homeowners 65+ (5% interest, lien stays), checked October 15, 2026
• RCW 84.38.030, Washington senior property tax deferral (age 60+, income threshold), checked October 15, 2026
• ORS 311.668, Oregon senior property tax deferral (age 62+), checked October 15, 2026
• California Board of Equalization, Proposition 19 (age 55+ base year value transfer, up to three times, claim within 3 years), checked October 15, 2026
• Consumer Financial Protection Bureau, reverse mortgages, checked October 15, 2026
• Eldercare Locator (U.S. Administration for Community Living), checked October 15, 2026
• BenefitsCheckUp (National Council on Aging), checked October 15, 2026

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