What is the name of the reverse mortgage that is insured by the FHA?

The Home Equity Conversion Mortgage (HECM) is the specific type of reverse mortgage that is insured by the Federal Housing Administration (FHA). This insurance provides protections for both the borrower and the lender, ensuring that the amounts borrowed do not exceed the home's value and offering security for the mortgage company in case of default.

HECMs are designed for seniors, usually over the age of 62, and allow them to convert a portion of their home equity into loan proceeds without having to make monthly mortgage payments. The funds can be used for various purposes, such as supplementing retirement income, covering healthcare expenses, or making home improvements. The FHA's involvement in HECMs also means that these mortgages must adhere to specific regulations and standards, promoting transparency and fair practices.

Home equity loans and cash-out refinances are different financial products that involve borrowing against home equity, but they require repayment with monthly payments. A reverse mortgage, in general, refers to any loan type that allows homeowners to access the equity in their home, but it is the HECM that specifically carries the FHA insurance, distinguishing it from other options in the market.