FHA-insured U.S. reverse mortgage program that lets eligible older homeowners draw on home equity under program-specific limits and protections.
A Home Equity Conversion Mortgage (HECM) is the main FHA-insured reverse-mortgage program in the United States. It lets eligible older homeowners convert part of home equity into loan proceeds while they continue occupying the property under program rules.
HECM matters because it is the reverse-mortgage program most finance readers actually encounter in U.S. housing-finance discussions. It combines the economic logic of a reverse mortgage with FHA insurance, standardized borrower protections, and program-specific limits.
A HECM is still a reverse mortgage, so the balance generally rises over time as money is drawn and charges accrue. What makes it distinct is that it operates inside an FHA-backed framework rather than as a purely proprietary lender product.
| Product | Structure | Typical borrower context | Main distinction |
| — | — | — | — |
| Reverse mortgage | Broad product family | Older homeowner drawing on equity | Umbrella concept |
| HECM | FHA-insured reverse mortgage | Borrower using the main U.S. program | Program rules, insurance, and standardized protections |
| Proprietary reverse mortgage | Private reverse mortgage | Higher-value or specialized cases | Outside the main FHA-backed program |
In practice, borrowers may receive proceeds as a line of credit, scheduled payments, a lump sum, or a combination, depending on program rules and loan design.
A homeowner with substantial housing equity wants to supplement retirement cash flow but remain in the property. Instead of selling the home, the homeowner uses a HECM line of credit to access part of the equity while continuing to occupy the residence and meet the program’s ongoing obligations.
HECM is the main FHA-insured reverse-mortgage program, but it is still only one segment of the broader Reverse Mortgage category.
FHA insurance changes lender protection and program structure, but the borrower still has to satisfy occupancy and property-related obligations.
Reverse Mortgage: The broader product family that HECM belongs to.
Federal Housing Administration (FHA): The U.S. agency linked to HECM insurance and program structure.
Loan-to-Value Ratio: Collateral value still shapes how much equity can be accessed.
Home Equity Conversion: The broader concept behind reverse-mortgage borrowing.
Home Equity Loan: A contrasting home-equity product that usually requires regular monthly repayment.