Reverse Mortgages in 2026: The $1,249,125 Everyone Misread — and the One Box That Can't Be Checked Later
Every December HUD publishes a number, and every January the internet gets it wrong in the same cheerful way.
This year the number is $1,249,125. Search reverse mortgages right now and you'll see it called the lending limit, the loan limit, the borrowing limit — tenth straight annual increase, which is true, and which everybody leads with.
It is not the amount anyone can borrow. It isn't close.
What that number actually is
HUD's own letter — Mortgagee Letter 2025-22, dated December 11, 2025 — calls it the Maximum Claim Amount, and sets it at $1,249,125 for FHA case numbers assigned during calendar year 2026. That figure is 150 percent of Freddie Mac's national conforming limit of $832,750.
Now go to the regulation that defines the term, 24 CFR 206.3. Maximum claim amount means "the lesser of the appraised value of the property, as determined by the appraisal used in underwriting the loan; the sales price of the property being purchased for the sole purpose of being the principal residence; or the national mortgage limit."
The lesser. Not the target, not the payout.
So if your house appraises at $500,000, your maximum claim amount is $500,000, and the $1,249,125 did precisely nothing for you. It's a ceiling on how much of a home's value FHA will count. It only does anything at all on homes worth more than that. For most homeowners it is a headline about somebody else's house.
What you can actually draw is smaller still — it's calculated from that claim amount along with age and rates, and no article on the internet can tell you yours. Which is roughly why I quit putting "up to" in my own emails.
"Doesn't the bank take my house?"
No. You stay on title — the rules require it. It's a lien against your house, the same as the mortgage you probably already have. Nobody's name replaces yours on the deed.
The loan comes due when the last borrower dies or the home stops being the principal residence. Not on a schedule somebody else picks.
"Will my kids get stuck with the debt?"
Here the regulation is unusually blunt, so I'll just quote it. 24 CFR 206.27(b)(8): "The borrower shall have no personal liability for payment of the outstanding loan balance. The mortgagee shall enforce the debt only through sale of the property. The mortgagee shall not be permitted to obtain a deficiency judgment against the borrower if the mortgage is foreclosed."
That's the non-recourse feature, in the government's own words. The house answers for the debt; you don't, and your estate isn't chased for a shortfall. And 24 CFR 206.55(f) says nothing in the spousal rules interferes with the ability of the borrower's estate or heirs to dispose of the property if they're otherwise entitled to.
If there's equity left over when the home sells, it belongs to your family. That's the part people are most surprised to hear, and it's been true the whole time.
The box that can't be checked later
This is the one I actually wanted to write about.
The age rule is simple: under 24 CFR 206.33, "the youngest borrower shall be 62 years of age or older at the time of loan closing." Fine. But plenty of couples aren't the same age, and when one spouse is under 62, the older one sometimes takes the loan alone.
There is a protection for that younger spouse. It's called a Deferral Period, and it lets an Eligible Non-Borrowing Spouse stay in the home after the borrowing spouse dies, instead of the loan being called. Good rule. It fixed a genuinely ugly problem.
Here's the catch, and it's in 24 CFR 206.55(c)(1): to be eligible, the spouse must have been married to the borrower at closing, must "have been properly disclosed to the mortgagee at origination and specifically named as an Eligible Non-Borrowing Spouse in the HECM mortgage and loan documents," and must occupy the home as their principal residence.
Named. At origination. In the documents.
And then 206.55(c)(2), which is the sentence I wish were in bigger type on every article about this: a non-borrowing spouse who was ineligible at the time of loan origination "is not subsequently eligible for a Deferral Period when the borrowing spouse dies or moves out of the home."
There is no fixing it in year eight. There's no amendment, no letter, no appeal. The paperwork either named that person on the day it was signed or it didn't.
Two more details belong with it. The surviving spouse has 90 days to establish legal ownership, or another ongoing legal right to remain for life, in the home.
And the money stops. Under 24 CFR 206.61(a), loan proceeds "may not be disbursed to any party during a Deferral Period." So a surviving spouse keeps the house. They do not keep the line of credit. Those are two different things, and families tend to learn the difference at the worst possible moment.
The counseling nobody tells you is a feature
Counseling from an independent HUD-approved counselor is required — and not only for the borrower. The rules say a non-borrowing spouse and any non-borrowing owner have to sit through it too, and the counselor is specifically required to walk that spouse through the ownership requirement and what happens if it isn't met.
I like this rule. It puts somebody in the room who isn't getting paid on the outcome. Go, bring your spouse, ask rude questions.
When this is the wrong answer
Often enough that I'll say it first.
A reverse mortgage is still a mortgage, and it still has obligations. You stay responsible for property taxes, hazard and flood insurance, and HOA or condo dues. Miss those and the loan can be called, same as any other lien. Depending on how the financial assessment goes, the lender may set aside part of the loan to cover those charges for you — good protection, and it leaves less for everything else.
If you're moving in a few years, the upfront costs rarely pencil out. If the whole goal is to leave the house free and clear to your kids, this works against that, and somebody should say so out loud. If a smaller second lien or an ordinary refinance solves the problem, that's usually cheaper.
With the 30-year fixed averaging 6.66% the week of July 30, 2026 per Freddie Mac's survey, the ordinary options aren't as cheap as they were three years ago. "Not as cheap" still beats "wrong product."
One thing squarely in the borrower's favor: you can pay a reverse mortgage down or off whenever you want, in full or in part, with no penalty.
Frequently Asked Questions
Is the 2026 reverse mortgage limit of $1,249,125 the amount I can borrow?
No. HUD Mortgagee Letter 2025-22 sets $1,249,125 as the HECM Maximum Claim Amount for FHA case numbers assigned from January 1 through December 31, 2026, and that figure equals 150 percent of Freddie Mac's national conforming limit of $832,750. The regulation at 24 CFR 206.3 defines maximum claim amount as the lesser of the property's appraised value, the sales price when the home is being purchased, or that national limit. It is a cap on how much home value FHA will count, not a loan amount, and it only has any effect on homes appraising above it. The amount a borrower can actually draw is calculated from the claim amount together with borrower age and interest rates, and is lower.
Does the bank take ownership of my house with a reverse mortgage?
No. The borrower remains on title. Under 24 CFR 206.35 any borrower is required to be on title to the property securing the loan, and the rules contemplate the borrower holding title in fee simple, as a qualifying leasehold, or as a life estate. The lender records a lien, the same as with a traditional mortgage. The loan becomes due and payable when the last surviving borrower dies or the home ceases to be the principal residence, subject to the deferral rules for an eligible non-borrowing spouse.
What happens to my spouse if they are under 62 and not on the loan?
Only if they were set up correctly at closing. 24 CFR 206.55(c)(1) requires an Eligible Non-Borrowing Spouse to have been the borrower's spouse at loan closing, to have been properly disclosed to the lender at origination and specifically named as an Eligible Non-Borrowing Spouse in the mortgage and loan documents, and to occupy the property as a principal residence. If those conditions were not met at origination, 24 CFR 206.55(c)(2) states the spouse is not subsequently eligible for a Deferral Period when the borrowing spouse dies or moves out. It cannot be corrected later, which is why the question belongs in the first conversation.
Do my children inherit the debt?
No. 24 CFR 206.27(b)(8) provides that the borrower has no personal liability for payment of the outstanding loan balance, that the lender may enforce the debt only through sale of the property, and that the lender may not obtain a deficiency judgment against the borrower if the mortgage is foreclosed. This is the non-recourse protection. If the home sells for more than the balance owed, the remaining equity goes to the estate or heirs, and 24 CFR 206.55(f) confirms the spousal deferral rules do not interfere with the estate's or heirs' ability to dispose of the property when otherwise legally entitled.
Is counseling really required before a reverse mortgage?
Yes, and it is independent of the lender. 24 CFR 206.41 requires the lender to provide a list of HUD-approved counselors at initial contact, and requires that the borrower, any Eligible or Ineligible Non-Borrowing Spouse, and any non-borrowing owner receive counseling. Where there is an eligible non-borrowing spouse, the counselor must specifically discuss the requirement to obtain ownership or another legal right to remain in the property for life after the last borrower dies, and the consequence of failing to do so. The counselor issues a certificate that the borrower provides to the lender.
Can a reverse mortgage be paid off early without a penalty?
Yes. 24 CFR 206.209 provides that the borrower may repay the mortgage in full or prepay it in part without charge or penalty at any time, regardless of any limitation on repayment stated in the mortgage. Borrowers who later sell, refinance into a traditional loan, or simply want to reduce the balance are free to do so. Property charges such as taxes, hazard and flood insurance, and association dues remain the borrower's obligation under 24 CFR 206.205 for as long as the loan is outstanding.
Not sure whether this is even the right question for your situation?
Tell me the age of the youngest person on title, whether there's a spouse who wouldn't be on the loan, and what you're actually trying to accomplish with the equity. I'll tell you straight whether a reverse mortgage fits — and when a plain second lien or a refinance does the job for less, I'll tell you that instead. If it does fit, I take the application and hand it to the reverse specialists on our team who do this all day.
If you — or a friend or family member — ever have a mortgage question, I'm right up the road.
📞 Call or text: (512) 577-8898
Stephen Steakley · Regional Branch Manager, CrossCountry Mortgage · NMLS #274124 · Equal Housing Lender. This is general information, not financial or legal advice, not a loan offer, and not a commitment to lend. No rates, payments, or loan terms are quoted; all figures referenced are published data from the named third-party sources and are not offers. Home Equity Conversion Mortgage program limits, eligibility rules, and requirements are set by HUD and FHA, not by us, and are subject to change. A reverse mortgage is a loan that must be repaid; the borrower remains responsible for property taxes, insurance, and property maintenance, and the loan may become due and payable if those obligations are not met. State law may impose additional requirements on a homestead. Eligibility and terms vary by borrower and by state and are subject to underwriting approval. Not affiliated with or endorsed by the U.S. Department of Housing and Urban Development, the Federal Housing Administration, or any government agency.
