The HECM tenure payment plan turns part of your home equity into a fixed monthly check that keeps coming for as long as you live in the house as your primary residence. The amount is set at closing and does not change afterward, no matter what happens to interest rates or your home’s value. Because the payments are backed by FHA insurance, they continue even if the loan balance eventually grows larger than the property is worth.
Tenure is one of several disbursement options under the Home Equity Conversion Mortgage program. It is the option built for predictable, lifetime cash flow, and it comes with trade-offs worth understanding before you commit.
How Your Monthly Payment Is Calculated
Three inputs set your starting point: the appraised value of your home (capped at the national HECM maximum claim amount of $1,249,125 for 2026), the age of the youngest borrower, and the expected interest rate at closing.1U.S. Department of Housing and Urban Development. HUD’s Federal Housing Administration Announces 2026 Loan Limits Those produce your principal limit, which is the gross borrowing power on the loan. Older borrowers typically qualify for a larger principal limit because the lender anticipates a shorter payout period.
From that principal limit, the lender subtracts the upfront costs rolled into the loan: the initial mortgage insurance premium (2% of the home’s appraised value or the maximum claim amount, whichever is less), origination fees, and other closing expenses like appraisal and title work. If a Life Expectancy Set-Aside is required, that comes off the top too. What remains is the net amount used to size your monthly payment.
HUD’s formula divides that net amount over a term equal to (100 minus the youngest borrower’s age) multiplied by 12 months. For a 70-year-old, that is a 360-month horizon. Borrowers older than 95 are treated as 95, which creates a minimum five-year horizon.2U.S. Department of Housing and Urban Development. HECM Calculator – Steps for Processing The horizon only sizes the payment. Your actual checks never stop while you remain in the home, even if you outlive the calculation period, because FHA insurance covers the difference.
Once the loan closes and the three-day rescission period passes, the payment is locked.3eCFR. 24 CFR Part 206 – Home Equity Conversion Mortgage Insurance Rate movements and changes in your home’s value do not affect the amount you receive.
The Life Expectancy Set-Aside Can Shrink Your Check
Before closing, the lender runs a financial assessment covering your credit history, income, and monthly expenses. If that assessment suggests you may struggle to keep up with property taxes and insurance, the lender must carve out a Life Expectancy Set-Aside (LESA) from your principal limit.4U.S. Department of Housing and Urban Development. HECM Financial Assessment and Property Charge Guide The LESA acts like an escrow account for property charges, paying them automatically over your expected lifetime. It also directly reduces what is available for your tenure payment. A large LESA can meaningfully cut your monthly amount, which is why some applicants work to resolve credit issues or document stronger residual income before applying.
How Long the Payments Continue
Tenure payments run for as long as at least one borrower lives in the home as a primary residence.5U.S. Department of Housing and Urban Development. HECM Adjustable Rate Mortgage Payment Plan If both spouses are co-borrowers, the surviving spouse keeps receiving the same monthly amount after the first spouse dies, with no adjustment.
Payments stop when any of these happens:
- You sell the home. The loan balance becomes due.
- The last surviving borrower is absent from the home for more than 12 consecutive months because of physical or mental illness, with no other borrower remaining. The loan becomes due and payable.6eCFR. 24 CFR Part 206 – Home Equity Conversion Mortgage Insurance – Section 206.27
- The last borrower dies. The servicer issues a due and payable notice to the estate.
A Non-Borrowing Spouse Does Not Receive Payments
If your spouse is not a co-borrower, they may be able to stay in the home after you die under the Eligible Non-Borrowing Spouse rules, provided they were married to you at closing, remained married throughout your lifetime, lived in the home continuously as a primary residence, and establish legal ownership or a legal right to remain within 90 days of your death.7eCFR. 24 CFR 206.55 – Deferral of Due and Payable Status for Eligible Non-Borrowing Spouses They must also keep paying property taxes and insurance, maintain the home, and certify occupancy.
One point gets missed often: the monthly tenure checks stop when the last borrower dies. The non-borrowing spouse can continue living in the home, but no payments come during the deferral period. The deferral only prevents the loan from being called due.7eCFR. 24 CFR 206.55 – Deferral of Due and Payable Status for Eligible Non-Borrowing Spouses If you want a spouse to receive income after you are gone, both of you need to be on the loan.
What You Must Do to Keep Payments Flowing
Tenure payments are not entirely passive. Several ongoing obligations can shut them off if ignored.
You have to stay current on property taxes, homeowners insurance, flood insurance where applicable, and any HOA or condo fees.8eCFR. 24 CFR Part 206 – Home Equity Conversion Mortgage Insurance – Section 206.205 If you fall behind, the servicer can advance the charges on your behalf and halt your tenure disbursements. Left unresolved, the shortfall can make the entire loan due and payable.
The home must stay in reasonable repair. Servicers inspect the exterior periodically to confirm the property is not deteriorating. If significant damage goes unaddressed, the servicer can call the loan due.
Each year, the servicer sends an occupancy certification. You or an eligible non-borrowing spouse must complete and return it; it can be submitted by mail, electronically, or verbally.9U.S. Department of Housing and Urban Development. What Are the Ongoing Requirements for HECM Borrower and Non-Borrowing Spouse Certifications Missing it can trigger an investigation into whether you have moved out, so treat it as a hard deadline.
Switching or Combining Payment Plans
Choosing tenure at closing does not lock you in forever. After the first 12 months, you can request a different payment option, including a line of credit, a term plan with a fixed end date, or a modified tenure. The administrative fee for changing your plan is capped at $20.10U.S. Department of Housing and Urban Development. Housing Counseling Handbook 7610.1 The recalculation uses your current outstanding balance and principal limit, so the new payment or credit line reflects what remains, not the original figures.11eCFR. 24 CFR Part 206 – Home Equity Conversion Mortgage Insurance – Section 206.26
A modified tenure plan combines a smaller monthly payment with a line of credit for unexpected costs such as medical bills or home repairs. You give up some monthly income for a reserve that grows over time, because the unused portion of a HECM line of credit increases at the same rate as the loan balance. For many retirees, this hybrid is more flexible than a pure tenure plan.
How the Loan Balance Grows
Every tenure payment adds to your outstanding debt. Interest accrues monthly on the running balance, and the annual mortgage insurance premium of 0.5% of the outstanding balance is added on as well. The effect compounds: you owe interest on previous interest, not only on the payments themselves. Over a long retirement, this can consume a large share of your equity.
Tenure is only available on adjustable-rate HECMs. Those loans use rates tied to either the one-year Constant Maturity Treasury index or the Secured Overnight Financing Rate (SOFR), plus a lender margin set at closing.12Ginnie Mae. APM 23-07 – Transition From LIBOR to SOFR-Based Rates for Home Equity Conversion Mortgages When rates rise, the balance grows faster; when they fall, growth slows. Either way, your monthly check does not change. The volatility shows up in how quickly equity erodes, not in your cash flow.
The Non-Recourse Ceiling
The HECM program includes a non-recourse clause that caps total liability at the home’s fair market value. The lender can only collect by selling the property, and no deficiency judgment can be pursued against you or your estate if the loan balance exceeds what the home is worth.13eCFR. 24 CFR 206.27 – Mortgage Provisions The FHA insurance fund absorbs any shortfall. That protection is what lets the tenure plan function as a true lifetime payment: even if the math eventually turns upside down, you keep receiving checks and your estate is never stuck with a bill larger than the home can cover.
Taxes and Means-Tested Benefits
Tenure payments are loan advances, not income. The IRS does not tax them.14Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction You will not receive a 1099, and the payments will not raise your adjusted gross income. The interest accruing on your HECM is generally not deductible until the loan is paid off, because mortgage interest is only deductible in the year it is actually paid, and reverse mortgage interest is added to the balance rather than paid out of pocket.
Social Security retirement benefits and Medicare are not means-tested, so tenure payments do not affect either.
Supplemental Security Income and Medicaid are a different story. Under SSI rules, reverse mortgage proceeds do not count as income in the month received. But any funds you have not spent by the first day of the following month count as a resource. If your total countable resources exceed $2,000 (the SSI individual limit), you can lose eligibility.15Centers for Medicare & Medicaid Services. Letter to State Medicaid Directors Regarding Lump Sums and Estate Recovery The same logic applies to Medicaid eligibility for aged and disabled individuals in states that follow SSI resource rules. If you rely on either benefit, spend or allocate each month’s payment before the next calendar month begins. Letting payments accumulate in a savings account is the fastest way to lose coverage.
What Your Heirs Face
After the last borrower dies or permanently leaves, the servicer sends a due and payable notice to the estate or heirs. From that notice, heirs have 30 days to state their intention: pay off the loan, sell the home, or surrender the property.16Consumer Financial Protection Bureau. With a Reverse Mortgage Loan, Can My Heirs Keep or Sell My Home After I Die Completing a sale or refinance can take up to six months, with the possibility of two additional 90-day extensions if heirs show active efforts to sell. That window can reach about 12 months total, with each extension requiring HUD approval.
If the loan balance is less than the home’s market value, heirs sell or refinance, pay off the loan, and keep the remaining equity. If the balance exceeds the home’s worth, heirs can satisfy the entire debt by selling the property for at least 95% of its current appraised value and turning over the net proceeds, even if that amount falls short of the full balance.17U.S. Department of Housing and Urban Development. Inheriting a Home Secured by an FHA-Insured Home Equity Conversion Mortgage The FHA insurance fund covers the gap, and no heir is personally liable for any remaining shortfall.
Before you choose tenure, it is worth running the numbers with a HUD-approved counselor to see what the balance might look like 10, 20, or 30 years out under different rate scenarios. Predictable lifetime cash flow is the benefit; a potentially large lien on the home your heirs inherit is the cost.