To get a reverse mortgage in California, every borrower on the loan must be at least 62 years old, occupy the home as a primary residence, hold enough equity to pay off any existing mortgage at closing, and complete HUD-approved counseling. On top of the federal rules, California Civil Code sections 1923 through 1923.5 add a mandatory plain-language disclosure, a signed counseling worksheet the lender must receive before approval, a ban on annuity cross-selling, and a statutory guarantee that the loan is nonrecourse. The reverse mortgage requirements in California combine those federal and state layers, and both must be satisfied before the loan can close.
Age, Residency, and Equity
Every person listed as a borrower has to be 62 or older. The home must be your primary residence, which rules out vacation homes and investment properties. You need to either own the property outright or carry a mortgage balance small enough that the reverse mortgage proceeds can pay it off at closing. Any existing lien gets cleared first; what’s left is what you can draw on.
The most common product is the Home Equity Conversion Mortgage (HECM), insured by the Federal Housing Administration. How much you can actually borrow depends on your age, current interest rates, and the appraised value of the home. Older borrowers and lower rates both increase the amount available.
Property Types That Qualify
Eligible properties include single-family homes, two-to-four unit buildings where you live in one of the units, condominiums, townhouses, planned unit developments, and manufactured homes built after June 1976.1U.S. Department of Housing and Urban Development. Handbook 7610.1 – Housing Counseling Program Handbook Homes held in a living trust also qualify. Title must be held in fee simple or on a renewable leasehold of at least 99 years, or at least 50 years past the youngest borrower’s 100th birthday.
The FHA caps how much equity the HECM program will insure. For 2026, the ceiling loan limit on a one-unit property is $1,249,125.2Federal Housing Finance Agency. FHFA Announces Conforming Loan Limit Values for 2026 Homes worth more than that can still support a HECM, but the calculation stops at the cap. Proprietary (non-FHA) reverse mortgages exist for higher-value properties and follow different rules.
The Financial Assessment
Before approving a HECM, the lender has to run a financial assessment of your willingness and capacity to keep up with ongoing property obligations. A reverse mortgage ends your monthly mortgage payment, but you still have to pay property taxes, homeowners insurance, flood insurance where applicable, and any HOA dues on time.3Consumer Financial Protection Bureau. What Are My Responsibilities as a Reverse Mortgage Loan Borrower? Falling behind can trigger foreclosure even though you owe nothing month to month on the loan itself.4Consumer Financial Protection Bureau. What Should I Do If I Have a Reverse Mortgage Loan and I Can’t Pay My Property Taxes or Homeowners Insurance
The assessment includes a credit history review, a look at your property charge payment history, and a residual income calculation. HUD sets regional thresholds. In the West, which covers California, a single-person household needs at least $589 in monthly residual income, and a two-person household needs at least $998.5U.S. Department of Housing and Urban Development. HECM Financial Assessment and Property Charge Guide Residual income is what remains each month after subtracting documented expenses from documented income.
Falling short of the residual income threshold, or having a history of late property charges, doesn’t automatically disqualify you. HUD instead requires the lender to set up a Life Expectancy Set-Aside (LESA). The LESA withholds a portion of your available loan proceeds in a dedicated account that pays property taxes and insurance for your expected time in the home. It protects you from foreclosure, but it reduces the cash you can access.
California’s Counseling and Worksheet Requirement
Both federal and California law require you to complete counseling with a HUD-approved counselor before taking out a HECM. California stacks additional disclosure requirements on top. Before counseling begins, the lender has to hand you a plain-language notice, printed in at least 16-point type, warning that a reverse mortgage is a complex financial transaction with significant implications for you and your estate.6California Legislative Information. California Code, Civil Code CIV 1923.5
The lender or counseling agency must also provide a “Reverse Mortgage Worksheet Guide” in at least 14-point type before the counseling session. The worksheet walks through five questions: what happens to other people living in your home after you die or move out, how you could default on the loan, what alternatives exist, whether you plan to use the proceeds to buy a financial product, and how the loan could affect your government benefits. The counselor signs the worksheet for in-person sessions, you sign it, and it goes back to the lender. Your loan application cannot be approved until the lender receives that signed worksheet.6California Legislative Information. California Code, Civil Code CIV 1923.5
Counselors are independent and are not allowed to steer you toward or away from any specific product. Come to the session with questions about your own finances, not just general curiosity about how reverse mortgages work. This is one of the most useful protections in the process.
The Ban on Annuity Cross-Selling
California Civil Code section 1923.2 bars lenders from requiring you to buy an annuity as a condition of getting a reverse mortgage.7California Legislative Information. California Civil Code 1923.2 The statute goes further: nobody involved in originating the loan can refer you to anyone for the purchase of an annuity, insurance, or other financial product until after the loan closes and your right-to-cancel window has expired.
Lenders must also keep internal safeguards in place so that loan originators have no involvement with, or financial incentive to promote, other financial or insurance products. The exceptions are the standard items in any mortgage closing: title insurance, hazard insurance, and flood insurance.7California Legislative Information. California Civil Code 1923.2 If anyone connected to your reverse mortgage tries to sell you an annuity or investment product, that is a violation of California law.
The Non-Recourse Guarantee
California’s statutory definition of a reverse mortgage includes the word “nonrecourse.” Repayment is limited to the value of the home itself.8California Legislative Information. California Civil Code 1923 You and your heirs can never owe more than the home is worth when the loan comes due. If the loan balance grows to $500,000 but the home’s market value has fallen to $350,000, the lender’s recovery is capped at the home’s value. On a HECM, FHA mortgage insurance covers the gap.9Federal Trade Commission. Reverse Mortgages
For a reverse mortgage product that is not FHA-insured, the California Department of Real Estate recommends confirming in writing that the loan is entirely nonrecourse, meaning no other assets or income can be used for repayment.10California Department of Real Estate. Reverse Mortgages – Is One Right for You? Proprietary products for higher-value homes should still carry that protection under state law, but reading the loan documents to verify it is worth the few minutes.
Your Three-Day Right to Cancel
After closing on a reverse mortgage, you have until midnight of the third business day to cancel without penalty. The right comes from the federal Truth in Lending Act and applies to any credit transaction secured by your principal residence.11Office of the Law Revision Counsel. 15 USC 1635 – Right of Rescission as to Certain Transactions The clock starts from the latest of three events: when you sign the loan agreement, when you receive the Truth in Lending disclosure, or when you receive the notice of your right to cancel.
To cancel, deliver written notice to the lender by mail, fax, or in person before the deadline. The lender cannot disburse funds or record a lien during those three days.12eCFR. 12 CFR 1026.23 – Right of Rescission If the lender failed to give you proper notice of your cancellation rights, the window extends to three years. Once you cancel, the lender has 20 days to return any money or property you provided and release any security interest.11Office of the Law Revision Counsel. 15 USC 1635 – Right of Rescission as to Certain Transactions
What Keeps the Loan in Good Standing
Qualifying is only the first part. A reverse mortgage becomes due and payable when you sell the home, transfer the title, or stop living there as your primary residence.7California Legislative Information. California Civil Code 1923.2 It also comes due when the last surviving borrower passes away.13Consumer Financial Protection Bureau. When Do I Have to Pay Back a Reverse Mortgage Loan?
California law sets specific rules for temporary absences. Leaving for fewer than 60 consecutive days does not trigger repayment. Absences between 60 days and one year are permitted if you take the steps your loan documents require to secure the property.7California Legislative Information. California Civil Code 1923.2 Beyond one year the loan generally becomes due, though HECM rules allow an exception for absences caused by physical or mental illness lasting up to 12 consecutive months.
You can pay off the loan voluntarily at any time. California law explicitly prohibits prepayment penalties on reverse mortgages.7California Legislative Information. California Civil Code 1923.2 If a lender fails to make scheduled loan advances required by your documents and does not fix the problem after you give notice, California law entitles you to triple the amount wrongfully withheld plus interest.
A Note on Non-Borrowing Spouses
If your spouse is not listed on the loan, HUD rules may let them remain in the home after you die or move permanently to care, but only if they were married to you at origination, were identified in the loan documents, and have lived in the home continuously as a primary residence since closing.14Consumer Financial Protection Bureau. Does Having a Reverse Mortgage Impact Who Can Live in My Home? A spouse you marry after taking out the loan does not qualify. If keeping a spouse in the home long-term matters, adding them as a co-borrower at origination is the safer path, even though using a younger spouse’s age in the calculation can reduce the loan amount.