Most large national banks no longer do reverse mortgages, but the product is still widely available through smaller regional banks, credit unions, and non-bank mortgage companies that specialize in the Home Equity Conversion Mortgage (HECM), the only reverse mortgage insured by the federal government. Any lender that originates a HECM must be approved by the Federal Housing Administration, and you can confirm a lender’s status through the Department of Housing and Urban Development’s online lender search tool.
The Big Banks Left This Market
Wells Fargo, Bank of America, and other major depository institutions stopped originating reverse mortgages years ago. If you walk into a branch of one of the country’s largest banks and ask about a HECM, you’ll be told they don’t offer one. That exit reshaped the industry and pushed origination toward lenders you may not recognize by name.
It didn’t empty the field. Some regional and community banks kept their FHA approval and still run dedicated mortgage divisions that handle HECM applications. For a borrower who wants the comfort of a local branch and a familiar institution, these smaller banks remain a viable option. They’re just no longer the default.
Who Actually Originates Reverse Mortgages Now
Three types of lenders dominate the market today.
Non-Bank Mortgage Companies
These firms focus exclusively on mortgage lending. They don’t offer checking accounts or savings products, and many have built their entire business around reverse mortgages. Their loan officers tend to have deep expertise in the specific regulatory requirements that govern equity conversion for seniors, and they often move faster through the approval process because they don’t carry the overhead of a full-service banking operation. If you’re getting a reverse mortgage in 2026, there’s a good chance it will come from a non-bank lender.
Regional and Community Banks
Not every bank walked away. Smaller institutions with FHA approval still originate HECMs, usually through a mortgage division rather than a general lending desk. The application experience feels closer to a traditional bank mortgage, and you’ll likely deal with someone locally. Availability varies by region, so a bank offering HECMs in one state may not offer them in another.
Credit Unions
Members of qualifying credit unions may find competitive terms, and the nonprofit structure of these institutions sometimes translates to lower fees. As with community banks, availability is uneven; not every credit union offers a reverse mortgage program, and eligibility usually depends on membership.
The FHA Approval Requirement
Whatever type of institution you approach, the lender must be FHA-approved to originate a HECM. This is not optional and it’s not a formality. The federal insurance behind the loan, the non-recourse guarantee, the borrower protections, the standardized cost structure — none of it applies unless the lender is authorized by HUD.
Verification is simple. HUD maintains a public lender search tool that shows whether a specific company holds current FHA approval. If a lender is pitching you a reverse mortgage and cannot be found in that database, that’s the end of the conversation. A legitimate HECM lender will not object to you checking.
Proprietary Reverse Mortgages Are a Separate Product
Some private lenders offer proprietary reverse mortgages that do not follow federal guidelines. These products are aimed at homeowners whose properties exceed the federal lending limit, which for 2026 is $1,249,125.1U.S. Department of Housing and Urban Development (HUD). HUD’s Federal Housing Administration Announces 2026 Loan Limits Because they aren’t FHA-insured, they skip the mortgage insurance premiums entirely.
The trade-off matters. Proprietary loans lack the consumer protections built into the HECM program, including the non-recourse guarantee that caps what borrowers and their heirs can owe at the home’s value.2Office of the Law Revision Counsel. 12 USC 1715z-20 – Insurance of Home Equity Conversion Mortgages for Elderly Homeowners The mandatory HUD counseling that comes with a HECM may not attach to a proprietary product the same way. If a lender offers you a reverse mortgage that isn’t a HECM, ask directly which federal protections apply and which don’t, and get the answer in writing.
Counseling Is a Gatekeeper, Not a Suggestion
Federal law requires every HECM applicant to complete a session with a HUD-approved housing counselor before submitting an application.2Office of the Law Revision Counsel. 12 USC 1715z-20 – Insurance of Home Equity Conversion Mortgages for Elderly Homeowners The counselor works for an independent agency, not the lender, and the session covers the full cost of the loan, how it affects your heirs, and what alternatives might serve you better.
After the session, you receive a Certificate of HECM Counseling (Form HUD-92902), and that certificate must be in your loan file before any lender can process your application.3HUD Exchange. HUD Housing Counseling Handbook Chapter 4 – Reverse Mortgage Housing Counseling A lender that offers to skip this step or rush you past it is telling you something important about how they operate. Counseling agencies are expected to waive or reduce the fee for households with income at or below 200% of the federal poverty level.4HUD. HUD Housing Counseling Handbook 7610.1
What Any HECM Lender Will Put You Through
The lender’s type — bank, credit union, or non-bank — doesn’t change the underlying program. The rules and the math come from HUD.
How Much You Can Borrow
Three variables determine the amount available: your age, current interest rates, and your home’s appraised value or the federal lending limit, whichever is lower. HUD publishes principal limit factor tables that assign a percentage to each combination of age and expected interest rate, and that percentage is applied to the lesser of the appraised value or the 2026 maximum claim amount of $1,249,125.1U.S. Department of Housing and Urban Development (HUD). HUD’s Federal Housing Administration Announces 2026 Loan Limits Older borrowers qualify for a higher percentage. Lower rates increase the available amount. Any existing mortgage balance gets paid off first from the proceeds.
Costs You Will See
Reverse mortgages carry several layers of cost that reduce the net amount you receive.
- Upfront mortgage insurance premium: 2% of the maximum claim amount or the home’s appraised value, whichever is less. On a $400,000 home, that’s $8,000.
- Annual mortgage insurance premium: 0.5% of the outstanding loan balance, added to your balance each year.
- Origination fee: the greater of $2,500 or a fee based on your home’s value — 2% of the first $200,000 plus 1% of any amount above that, capped at $6,000.
- Third-party closing costs: FHA appraisal, title insurance, recording fees, and similar charges. Appraisals typically run $300 to $600, and total closing costs generally fall between $1,500 and $4,000.
- Counseling fee, paid to the HUD-approved counseling agency.
Most of these can be rolled into the loan rather than paid at closing, but doing so reduces the equity available to you. On a $400,000 property, total upfront costs might consume $15,000 to $20,000 of your available proceeds.
The Financial Assessment
Every FHA-approved lender is required to run a financial assessment. They review your credit history, and they look specifically at whether you’ve paid property taxes on time over the past two years and maintained continuous homeowners insurance.5HUD. HECM Financial Assessment and Property Charge Guide If the assessment surfaces risk factors, the lender may require a life expectancy set-aside, which withholds a portion of your loan proceeds in escrow to cover future property charges. That set-aside reduces the cash you actually receive.
The documentation required mirrors what any mortgage lender asks for: government-issued proof of age confirming the youngest borrower is at least 62, proof that the home is your primary residence, income statements and tax returns, and current information about liens, mortgage balances, and the home’s condition.6eCFR. 24 CFR Part 206 – Home Equity Conversion Mortgage Insurance
How to Shop
Because the biggest banks are out of the market, comparison shopping means looking at lenders you may not have heard of. A few practical steps protect you.
Confirm FHA approval through HUD’s lender search before you share personal information. Ask each lender for a written breakdown of origination fees, mortgage insurance premiums, and third-party closing costs, and compare those alongside the interest rate and payment plan. Complete your HUD counseling early; the counselor can walk you through cost estimates from multiple lenders and flag anything that looks off. And if a lender pushes a proprietary reverse mortgage instead of a HECM, make sure you understand what federal protections you’d be giving up before you sign anything.