Lending
The Reverse Mortgage (HECM) Process, Step by Step
The HECM reverse mortgage process step by step, from the first conversation and HUD counseling to closing, funding and what comes after.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
What are the steps to get a reverse mortgage?
This page is general information, not legal or tax advice. Most federally insured reverse mortgages are Home Equity Conversion Mortgages, or HECMs, and they follow the same path. Here it is in order:
- A first conversation about your goals.
- Counseling with an independent HUD-approved HECM counselor.
- The application.
- The financial assessment.
- The appraisal.
- Underwriting and the final decision.
- Closing.
- The three-day right to cancel, when it applies.
- Funding.
- Life with the loan: yearly occupancy checks and ongoing obligations.
Each step is explained below. New to reverse mortgages? Start with our reverse mortgage overview.
What happens in the first conversation?
It's a conversation, not an application. We talk about why you're considering a reverse mortgage, how long you plan to stay, who else lives in the home and what other choices you have. Adult children are welcome if you'd like them there.
HUD Handbook 4000.1 (Update 18, issued August 12, 2026) limits what a lender can do before counseling is done. It can explain the program, discuss whether you may be eligible, share information on fees, provide sample loan documents and order a preliminary title search, a value estimate and a credit report for a preliminary review. It can't collect any fee or your bank or credit card information at that stage. Maggie B. Hopkins is a mortgage broker and a Reverse Mortgage (HECM) Lending Specialist, so she can compare offers across lenders.
Why do I need counseling, and how does it work?
HUD requires it. The handbook says the lender must give you a list of HUD-approved counseling agencies, including ones that counsel by phone. You choose the counselor, and the counselor is independent of the lender and the broker.
The counselor covers how the loan works, the costs, your obligations and other options. When you finish, the counselor gives you a Certificate of HECM Counseling, signed and dated by the counselor and by everyone required to attend. That can include a non-borrowing spouse. The handbook says the certificate is valid for 180 days from the date counseling was completed, and the lender can't charge fees or process the application until it has the signed certificate.
What happens at application and the financial assessment?
After counseling, you complete the application. The handbook names it as Fannie Mae Form 1009, the Residential Loan Application for Reverse Mortgages.
Then comes the financial assessment. HUD Handbook 4000.1 defines it as the lender's review of your willingness and capacity to meet your financial obligations and keep up with the loan's requirements. The underwriter looks at your credit history, your record of paying property taxes and insurance, your monthly expenses and your income.
The handbook also tells lenders to consider that some borrowers seek a HECM because of financial trouble, and how the loan itself might help. If the assessment raises concerns, the lender may require a Life Expectancy Set-Aside. That sets aside part of your available funds to pay property taxes and homeowners insurance. Learn more on our reverse mortgage obligations page.
What does the appraisal check?
An FHA appraisal sets the home's value, which affects how much you can access. The appraiser also checks whether the home meets FHA's property standards.
If the appraisal calls for repairs, inspections or certifications, the handbook says the lender must get evidence they were done, along with the repair cost estimate. Some repairs have to be finished before closing. We walk through any repair list with you so there are no surprises. See reverse mortgage costs for the appraisal and other charges.
What happens at underwriting and closing?
Underwriting brings it all together: the counseling certificate, the application, the financial assessment, title and the appraisal. The lender then makes its final decision.
At closing you sign the note, the mortgage and the loan agreement. You'll also choose how to receive the money, such as a line of credit, monthly payments or a mix. Our payout options page explains each one. If you're buying a new home with a HECM instead, see HECM for Purchase. We review every page with you before you sign.
Can I change my mind after I sign, and when do I get the money?
When you take a reverse mortgage on the home you already live in, federal Truth in Lending rules generally give you three days to cancel. HUD Handbook 4000.1 says HECM proceeds may not be paid out until the three-day rescission period under 12 CFR Part 1026 expires, if it applies. Interest isn't charged on funds held during those three days.
It may not apply when the loan is used to buy a home, such as a HECM for Purchase. Ask your lender to confirm in writing whether it applies to your loan.
After the rescission period ends, if it applies, the loan funds. The handbook calls this the disbursement date, the date the proceeds are made available to you. Any existing mortgage is paid off first. HUD's Programs of HUD 2025 says existing liens must be paid at settlement.
Interest starts on the disbursement date and is added to the balance monthly, according to the handbook. Your balance grows over time. That's normal for a reverse mortgage.
What happens after the loan closes?
You keep living your life in your home, with a few duties that matter a great deal:
- Yearly occupancy certification. HUD Handbook 4000.1 says the lender must get a certification each year that the home is still your principal residence, and an eligible non-borrowing spouse's too. It may be done on paper, electronically or by phone. Answer it promptly.
- Property taxes, insurance and upkeep. You still pay them and keep the home in good repair, unless a set-aside pays the taxes and insurance for you.
- Read your statements. Keep every statement and letter from your servicer, and call us if something doesn't look right.
Our pages on your ongoing obligations and heirs and spouses cover what happens later.
How long does it take, and what should I gather?
Timing depends on when counseling can be scheduled, the appraisal, any repairs and title. There's no set number of days. We give you a calendar at the start and keep it current.
Having these ready helps. Your lender will give you its exact list:
- photo ID for each borrower,
- your signed Certificate of HECM Counseling,
- your current mortgage statement, if you have one,
- your property tax bill, homeowners insurance and any HOA statement,
- proof of income, such as Social Security, pension or retirement account statements,
- trust documents, if the home is held in a trust, and
- information about anyone else living in the home, including a spouse who won't be on the loan.
How do you start the reverse mortgage process?
Call (916) 549-3131. A first conversation is about whether a HECM fits your plans at all. If it doesn't, we'll say so. You can also fill out the loan options form and choose "A reverse mortgage," or send us a note.
If you're also thinking about selling and moving to something smaller, our Well MOVED program puts the move, the sale and the money on one plan.
Frequently Asked Questions
What is the first step to get a reverse mortgage?
A conversation about your goals, then counseling with an independent HUD-approved HECM counselor. The lender can't charge fees or process your application until it has your signed counseling certificate.
How long is the HECM counseling certificate good for?
HUD Handbook 4000.1 says the Certificate of HECM Counseling stays valid for 180 days from the date counseling was completed.
Can my family join the counseling session?
Yes, if you want them there. A non-borrowing spouse may be required to attend. The counselor works for you, not the lender.
What is the financial assessment?
It's the lender's review of your credit, your history of paying property taxes and insurance, your income and your expenses, to see whether the HECM will work for you over time. It can lead to a set-aside for taxes and insurance.
Is there a right to cancel a reverse mortgage?
When it's on the home you already live in, federal rules generally give you three days to cancel, and HUD says funds can't be paid out until that period ends. It may not apply when you use a HECM to buy a home, so ask your lender to confirm.
What do I have to do every year after closing?
Certify that the home is still your principal residence when your servicer asks, pay property taxes and insurance (unless a set-aside covers them) and keep the home in good repair.
How long does the whole process take?
It depends on counseling, the appraisal, repairs and title. There's no fixed number of days. We give you a calendar at the start and keep it updated.
Is this page advice for my situation?
No. It's general information about how the HECM process works. Talk it through with your counselor, your family and your own legal or tax advisor.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
Loans are arranged through Maggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307. This is not a commitment to lend. All loans subject to credit approval and property qualification. Equal Housing Lender.
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