Aging in Place Grants

Using a Reverse Mortgage (HECM) to Pay for Home Modifications

Updated October 18, 2026 · By the Aging in Place Grants research desk · How we research

Homeowners 62 and older can turn home equity into cash for modifications with an FHA-insured HECM, but it costs money and reduces what heirs inherit.

At a glance

Key amounts (check the source for the current figure)
HECM maximum claim amount (FHA case numbers assigned on or after Jan. 1, 2026)$1,249,125
Initial FHA mortgage insurance premium (set in 2017)2% of the maximum claim amount
Annual FHA mortgage insurance premium (set in 2017)0.5% of the outstanding balance

What it can pay for

  • Any home modification the borrower chooses, such as walk-in showers, ramps, stair lifts or a first-floor bedroom
  • Repairs the lender requires before closing
  • Paying off an existing mortgage to free up monthly cash
  • Ongoing home maintenance, taxes and insurance

Who qualifies

  • Homeowners 62 or older
  • The home must be your principal residence, where you live most of the year
  • You must own the home outright or have a low enough balance to pay off at closing
  • You cannot owe federal debt such as unpaid federal taxes or federal student loans (loan money can pay it off)
  • The home must meet FHA property standards; the lender may require repairs
  • You must complete counseling with a HUD-approved reverse mortgage counselor

How to apply

  1. List the home changes you need and get rough cost estimates first.
  2. Check grants and low-cost loans first (Area Agency on Aging, USDA 504, VA, state programs). You may not need to borrow.
  3. Meet with a HUD-approved reverse mortgage counselor. Find one at HUD's website or by calling 800-569-4287.
  4. Get quotes from more than one FHA-approved lender. Compare upfront costs, interest rates and payout options.
  5. Bring any lender quotes to your counselor and ask questions until you understand the loan.
  6. Plan how you will keep paying property taxes, insurance and upkeep for as long as you live there.

Watch out for

  • Interest and mortgage insurance are added to the balance every month, so the debt grows and home equity shrinks.
  • You must keep paying property taxes, homeowner's insurance and maintenance, or the loan can come due.
  • The loan must be repaid when the last borrower or eligible spouse sells, moves out or dies; heirs usually sell the home to repay it.
  • There are limits on how much you can take in the first year, and taking a lump sum you do not need means paying interest on it.
  • A reverse mortgage is expensive if you might move in a few years.
  • Be wary of anyone pushing a reverse mortgage together with a home improvement contract or an investment product.

When a reverse mortgage makes sense for home changes

For many older homeowners, the house is their biggest asset. A reverse mortgage lets you turn some of that value into cash without selling or making monthly mortgage payments. That cash can pay for a walk-in shower, a ramp, a stair lift or even a first-floor bedroom.

It is also expensive and complicated. This guide explains how the most common type works, what it costs, and when it may not be the right fit.

What a HECM is

The most common reverse mortgage is the Home Equity Conversion Mortgage, or HECM. It is insured by the Federal Housing Administration (FHA) and offered through FHA-approved lenders 3.

You can keep living in the home as long as you keep up with property taxes and homeowner's insurance 3. HUD says money from a HECM can be used for home maintenance, repairs or living expenses 3.

Who can get one

According to the Consumer Financial Protection Bureau 2:

  • You must be 62 or older.
  • The home must be your main residence, where you live most of the year.
  • You must own the home outright or have a small enough mortgage to pay off at closing. The reverse mortgage can be used to pay it off.
  • You cannot owe federal debt, like federal income taxes or federal student loans. Loan money can be used to pay it off.
  • The home must meet the lender's property standards. If not, the lender will list repairs needed before approval.
  • You must meet with a HUD-approved reverse mortgage counselor.

How much you can get

For FHA case numbers assigned on or after January 1, 2026, the HECM maximum claim amount is $1,249,125 nationwide 1. That is a ceiling on the home value used in the math, not the amount you get.

The amount you can actually borrow depends on 3:

  • The age of the youngest borrower or eligible non-borrowing spouse
  • Current interest rates
  • The lowest of the appraised value, the FHA limit, or the sale price

Older borrowers and lower interest rates generally mean more money.

What it costs

A HECM has real costs. The biggest are:

  • FHA mortgage insurance. Rates set in 2017 are 2 percent of the maximum claim amount upfront and 0.5 percent of the loan balance each year 5. Ask your lender to confirm current rates.
  • Interest. Interest is added to the loan each month, so the balance grows 4.
  • Closing costs and fees. These vary by lender. Compare quotes.

You still pay property taxes, insurance and upkeep 4. You must either have the money for these or set aside part of the loan at closing 2.

How you get the money

HECMs offer several ways to take funds. Every option limits how much you can access in the first year 4. Taking one large lump sum usually gives you less money overall, and you pay interest on funds even if you do not spend them 4.

For home changes, ask your counselor about a line of credit. It can let you draw what you need when the contractor's bill is due, instead of borrowing it all at once.

When the loan is repaid

The loan comes due when the last borrower or eligible spouse sells the home, moves out or dies 4. Heirs usually sell the home to pay it back. Neither you nor your heirs will owe more than the home is worth 4.

Counseling is required, and useful

Before you get a HECM, you must meet with a HUD-approved counselor 2. Find one through HUD or by calling 800-569-4287 4. The CFPB suggests bringing any lender quotes to the session 4. A good counselor will also talk about other options.

Questions to ask your counselor and lender

  • How much could I get at my age and today's rates?
  • What are all the upfront costs, and which can be paid from the loan?
  • Which payout option fits a home project that will be paid in stages?
  • Will you require repairs before closing? How are they paid?
  • How much will I need to set aside for taxes and insurance?
  • What happens if my spouse is not on the loan?
  • What happens if I move into assisted living for more than a year?

Write the answers down, and compare them across at least two lenders.

Alternatives to compare

The CFPB suggests looking at other choices first 4, such as:

  • Waiting until you are older, when you may qualify for more
  • A home equity loan or line of credit
  • Refinancing
  • State or local property tax deferral or repair help
  • Moving to a more affordable home

For home changes specifically, check grants first. Area Agencies on Aging, USDA Section 504, VA grants, Medicaid waivers, state programs and nonprofit repair groups may cover all or part of the cost without a loan.

Red flags

  • A salesperson who pairs a reverse mortgage with a home improvement contract and pushes you to sign quickly
  • Pressure to buy an annuity or investment with the loan money
  • Anyone discouraging you from talking to a counselor, a lawyer or family

The CFPB's advice: proceed with caution, and do not sign until you understand how the loan works 4.

Common questions

What is the HECM limit for 2026?

For FHA case numbers assigned on or after January 1, 2026, the maximum claim amount is $1,249,125. The amount you can actually borrow is usually less and depends on your age, interest rates and your home's value.

Can I use a reverse mortgage to pay for a walk-in shower or ramp?

Yes. HUD says HECM money can be used for home maintenance, repairs or living expenses. Many people use it to adapt the home so they can stay.

Will my children lose the house?

Not automatically, but the loan must be repaid when the last borrower or eligible spouse leaves or dies. Heirs often sell the home to repay it, and they never owe more than the home is worth.

Do I have to get counseling?

Yes. Counseling with a HUD-approved agency is required before you can get a HECM.

What happens to my spouse if they are under 62?

HUD uses the age of an eligible non-borrowing spouse, along with the borrower's, to figure how much can be withdrawn. Ask your counselor how protections for eligible non-borrowing spouses work in your situation.

Sources

  1. HUD's Federal Housing Administration Announces 2026 Loan Limits (HUD No. 25-145) — U.S. Department of Housing and Urban Development. Checked October 18, 2026.
  2. Can anyone take out a reverse mortgage loan? — Consumer Financial Protection Bureau. Checked October 18, 2026.
  3. HUD FHA Reverse Mortgage for Seniors (HECM) — U.S. Department of Housing and Urban Development. Checked October 18, 2026.
  4. Considering a reverse mortgage? — Consumer Financial Protection Bureau. Checked October 18, 2026.
  5. Mortgagee Letter 2017-12: Changes to HECM Mortgage Insurance Premiums and Principal Limit Factors — U.S. Department of Housing and Urban Development. Checked October 18, 2026.