Understanding which type is right for you could be the difference between getting a loan that truly serves your retirement and one that falls short of what your home’s equity could provide.

At Palm Desert Reverse Mortgage and Long Beach Reverse Mortgage, we offer both — and we’ll help you determine which fits your situation before you sign anything.

What Is a HECM Reverse Mortgage?

HECM stands for Home Equity Conversion Mortgage. It is the only reverse mortgage backed by the federal government through the FHA (Federal Housing Administration), and it is by far the most common type — accounting for the vast majority of reverse mortgages originated in the United States.

Because it’s FHA-insured, the HECM comes with built-in consumer protections: mandatory independent counseling before you apply, a non-recourse guarantee (you can never owe more than your home is worth), and consistent guidelines enforced by HUD.

HECM loans have a national lending limit — in 2025, that limit is approximately $1,149,825. This means regardless of how valuable your home is, the HECM calculation is capped at that amount.

For most seniors in California, the HECM is the right choice. But for homeowners with high-value properties — particularly in Palm Desert, where luxury homes are common — a proprietary loan may unlock significantly more cash.

What Is a Proprietary Reverse Mortgage?

Proprietary reverse mortgages are private loans, offered by individual lenders, that are not backed by the federal government. Because they’re not subject to FHA lending limits, they can provide access to equity on homes valued well above the HECM cap.

In Palm Desert, where median home values frequently exceed $700,000 and luxury properties can reach several million dollars, a proprietary reverse mortgage can often deliver substantially more proceeds than a HECM.

The trade-off: proprietary loans don’t carry the same federal consumer protections as HECMs, and terms can vary significantly between lenders. This is where working with an independent broker — rather than a single lender — becomes particularly important.

HECM vs. Proprietary: Key Differences at a Glance

Loan limit: HECM is capped at the FHA lending limit. Proprietary has no federal cap.

Government backing: HECM is FHA-insured. Proprietary is not.

Counseling requirement: HECM requires HUD-approved counseling. Proprietary often does too, but it varies.

Non-recourse protection: Both types typically include non-recourse language, but confirm this with your specific proprietary lender.

Home value suitability: HECM is better for homes at or below the national lending limit. Proprietary is better for high-value homes.

Availability: HECM is available from all HUD-approved lenders. Proprietary is available from select lenders — which is why having a broker who works with multiple institutions matters.

Which Is Right for Your Home in Palm Desert or Long Beach?

If your home is valued under $1 million, a HECM will almost certainly serve you well. The federal protections, standardized process, and broad lender competition make it an efficient and safe choice.

If your home is valued significantly above the HECM lending limit, or if you own a luxury property in Palm Desert, a proprietary loan may deliver tens of thousands of dollars more in available proceeds. We can run both calculations side by side so you see exactly what each option would provide.

As an independent broker, we are not tied to any single lender or loan type. We shop your loan across all major banks and lenders — HECM and proprietary — to find the structure that puts the most money in your pocket at the lowest cost.

Frequently Asked Questions

Is a HECM safer than a proprietary reverse mortgage? The HECM has more federal consumer protections, which many borrowers find reassuring. That said, reputable proprietary lenders offer strong loan terms with their own protections. We only work with lenders we trust.

Can I switch from a proprietary to a HECM later? Yes, through a refinance. Some borrowers start with a proprietary loan and refinance to a HECM if circumstances change.

Do both types require me to stay in the home? Yes. Both HECM and proprietary reverse mortgages require the home to be your primary residence.

Are there income or credit requirements? Reverse mortgages do not require monthly income minimums the way a traditional mortgage does, but there is a financial assessment to ensure borrowers can maintain property taxes, insurance, and basic upkeep.