A reverse mortgage is a loan that lets a homeowner withdraw a portion of their home’s equity, with repayment deferred until the loan becomes due and payable, for example after the last borrower dies, the home is sold, or no borrower lives there any longer. I help homeowners get a reverse mortgage on Long Island and across downstate New York, comparing HECM and jumbo options from the lenders I work with.
The main type is the Home Equity Conversion Mortgage (HECM), which HUD calls the only federally insured reverse mortgage; the youngest borrower must be 62 or older. Interest and fees are added to the balance each month, so what you owe grows over time.
A reverse mortgage is not suitable for everyone, and counseling is required. It is a loan that you or your heirs will eventually have to repay, usually by selling the home. Every HECM requires HUD-approved counseling, which cannot be waived. If you fall behind on property taxes, insurance or upkeep, or no borrower lives in the home, the loan can come due and foreclosure can follow. Bring your family and your own attorney into the decision.
This page is not from HUD or FHA and was not approved by HUD or any government agency.
- HECM borrowers must be 62 or older and live in the home as their principal residence.
- HUD-approved counseling is mandatory and cannot be waived.
- Unpaid taxes, insurance or upkeep can make the loan due.
- The 2026 HECM maximum claim amount, $1,249,125, is not the amount you receive.
How a HECM reverse mortgage works
HUD says HECM funds can be used for home maintenance, repairs or general living expenses, and that HECMs are available only through FHA-approved lenders.
Is there a monthly payment? There’s no required monthly mortgage payment, but you still pay property taxes, homeowners insurance (and flood insurance if your home is in a flood zone), any condo or HOA charges and upkeep, and the home has to stay your principal residence. Fall behind on those charges and the loan can come due and foreclosure can follow.
New York’s Department of Financial Services (DFS) says you retain ownership of the home, but that doesn’t stop the loan from coming due if those obligations aren’t met or no borrower lives there. You pay for FHA’s mortgage insurance through premiums, usually added to your balance, and DFS notes it is for the benefit of your lender, not you. HECMs follow different rules than FHA purchase loans on Long Island.
Who qualifies for a HECM, and who it may suit
The Consumer Financial Protection Bureau (CFPB) lists the HECM requirements:
- Age: the youngest borrower is 62 or older at closing.
- Principal residence: you live there the majority of the year.
- Little or no mortgage: any balance is paid off at closing.
- No federal debt, such as federal income taxes or student loans, unless loan money pays it off.
- Money for property charges, from your own funds or set aside from the loan.
- Condition and counseling: the home is in good shape, and you complete counseling.
A HECM generally fits owners who plan to stay and can comfortably carry the property charges.
Co-ops, condos and two-families: which Long Island and NYC homes qualify
A HECM works on a one- to four-unit home where you live in one unit, so a two-family with a tenant upstairs can qualify. A condo needs FHA approval, and a manufactured home has to meet HUD’s rules. Co-ops are the exception: FHA won’t insure a HECM on a co-op. New York allows a separate reverse loan secured by co-op shares, but it isn’t FHA-insured, only DFS-authorized lenders can make it, and they don’t have to offer it. If you own a co-op, ask me. I can check whether any lender I work with offers one, and I arrange co-op loans on Long Island if another option fits better.
Reverse mortgage counseling comes first
A lender must give you a list of HUD-approved HECM counselors when you first make contact. The borrower, any non-borrowing spouse and any non-borrowing owner must be counseled. DFS says HECM counseling cannot be waived but can be done in person or by phone. Until the lender has your counseling certificate, it can’t charge fees or process an application. There’s no set national counseling fee; the agency tells you its fee up front, and it can be paid from the loan at closing.
Find a counselor through HUD’s HECM page, by calling HUD at (800) 569-4287, or on the DFS reverse mortgage page. New York bars both lenders and me from steering you toward or away from any counselor.
Nassau and Suffolk taxes, insurance and upkeep stay with you
Under HUD’s rules, property taxes, hazard and flood insurance, ground rent and condo or HOA fees remain your obligation, along with upkeep. One catch: a HECM doesn’t let you join a property tax deferral program. Because unpaid charges can make a HECM due, watch your Long Island tax bill:
- Nassau. Challenges go to the Assessment Review Commission (ARC); filings on the 2028/29 tentative roll run January 4 to March 1, 2027.
- Suffolk. Grievances go to your town assessor; town Boards of Assessment Review meet the third Tuesday in May, per the state Tax Department. Confirm with your town.
- Enhanced STAR. One resident owner must be 65 or older by December 31, with income of $110,750 or less for 2026 benefits ($113,550 for 2027). If you already get Basic STAR, the state now upgrades you to Enhanced on its own once you qualify.
See my Nassau County mortgage broker and Suffolk County mortgage broker guides, and ask a tax professional about your own bill.
The credit and income check, and the tax set-aside
Before approval, the lender reviews your credit, your income against your bills and your record on taxes and insurance (HUD calls it a financial assessment). If the review falls short, the lender will require a set-aside, called a LESA, that holds back part of the loan for your taxes and insurance, or it may decline the loan. With Long Island tax bills, that can take a real bite out of what’s available. Depending on the type, the servicer pays those bills from the set-aside or sends you money twice a year to pay them yourself, and if the set-aside runs out, the bills are back on you. Condo and HOA fees stay yours either way.
When does a reverse mortgage have to be paid back?
A HECM reverse mortgage becomes due and payable when a borrower dies and the home is not a surviving borrower’s principal residence, or when all title is conveyed; it has no set payoff date. With HUD’s approval it can also become due if no borrower lives there as a principal residence, property charges go unpaid, or another obligation is not met.
Nursing homes, hospital stays and time away
A temporary stay in a hospital, rehab or nursing home doesn’t by itself make the loan due. If you’re away for health reasons more than 12 months in a row, or move out for good, and no other borrower lives there, it can. A spouse who isn’t on the loan doesn’t count as a borrower for this. The servicer checks every year that you still live there, and if you split the year between two homes, the Long Island house has to be the one you live in most of the year.
If your spouse is not on the loan
Federal rules can defer repayment for an Eligible Non-Borrowing Spouse named in the loan documents, but only while strict conditions are met, including living in the home and establishing a legal right to remain within 90 days of the borrower’s death. No more loan funds are paid out. Separately, DFS says that in New York an eligible surviving non-mortgagor spouse who obtains good, marketable title within 90 calendar days of the borrower’s death must be given notice and 120 calendar days to keep the home by paying the lesser of the unpaid principal balance or 95% of the appraised value.
What heirs should know
DFS calls reverse mortgages non-recourse: under HUD’s rule, the borrower has no personal liability for the balance, and the lender may enforce the debt only through sale of the property. When the loan comes due, heirs have three choices:
- pay off the balance and keep the house;
- sell for at least the balance or 95% of the appraised value, whichever is less, and keep anything above the balance; or
- sign the house over to the lender with a deed in lieu of foreclosure.
HUD’s heirs fact sheet says the loan must be satisfied within 30 days of the borrower’s death, and the lender may approve 90-day extensions.
How much can you get from a reverse mortgage on Long Island?
How much you can get from a HECM on Long Island depends on the youngest borrower’s age (or an eligible non-borrowing spouse’s), the expected interest rate and your home’s value, counted only up to a 2026 limit of $1,249,125. HUD Mortgagee Letter 2025-22 sets that limit nationwide, so it’s the same in Brooklyn as in Babylon (see my 2026 New York loan limits, HECM included). It is not what you receive. The starting point is the lowest of your appraised value, the HECM limit or, if you’re buying, the price. HUD’s tables then set how much of that you can borrow. Any mortgage you still have is paid off from that amount. After that, no monthly mortgage payment is required, but property taxes, insurance and upkeep are still yours, the home has to stay your principal residence, and the balance grows. With August 2026 median single-family prices of $911,000 in Nassau and $760,000 in Suffolk, per OneKey MLS (see Nassau and Suffolk home prices by month), the appraised value is the figure used for many homes here.
Fixed rate or adjustable: how you get the money
- Fixed rate: one lump sum at closing. You can’t draw more later, and anything you don’t take at closing is gone.
- Adjustable rate, line of credit: draw when you choose, in the amounts you choose.
- Adjustable rate, monthly payments: equal amounts for a number of months you pick (term), or until the loan is paid off or comes due (tenure).
- Adjustable rate, both: monthly payments plus a line of credit (modified term or tenure).
With an adjustable rate you can switch plans later while money is left, though the lender may charge a fee.
The first-year limit, and how the line of credit grows
You can’t take it all at once. In the first 12 months you can generally use up to 60% of the total you qualify for (HUD calls it the principal limit), and paying off any mortgage and closing costs counts toward that. If those take more than half, you can use enough to cover them plus another 10% of the total. On an adjustable HECM you can draw the rest after the first year. A fixed-rate lump sum is held to the same cap.
The part of a line of credit you haven’t used grows every month, at the loan’s interest rate plus the annual mortgage insurance charge. That isn’t money in your pocket. It’s more you can borrow, and anything you draw is added to the balance.
What does a HECM reverse mortgage cost?
Most HECM costs, from FHA mortgage insurance to the origination fee and closing costs, can be paid from the loan, which adds to the balance. Your counselor and the lender’s disclosures show your actual numbers.
- Upfront FHA mortgage insurance: a one-time premium HUD sets as a percentage of your home’s appraised value (or the price, if you’re buying for less), counted only up to the $1,249,125 limit.
- Annual FHA mortgage insurance: charged on the balance each year and added to it monthly.
- Origination fee: HUD caps it, and a lender can charge less than the cap.
- Third-party costs: title, appraisal, credit report, survey and recording, limited to reasonable and customary amounts. In New York you also need your own attorney at closing; the law requires one.
Costs include FHA mortgage insurance premiums, interest, an origination fee and other closing costs. Any terms described are projections; actual terms may vary. Interest and mortgage insurance are added to the balance every month, and the balance is due in one payment when the loan comes due: generally when the last borrower dies, sells the home or no longer lives there, or if property charges or other loan obligations aren’t met. For as long as the loan is open you must pay property taxes, homeowners insurance (and flood insurance if required) and any condo or HOA charges, and keep the home in good repair; if you don’t, the loan can come due and the home can be foreclosed. Origination fees for HUD/HECM loans are capped.
HECM for Purchase (H4P): downsizing to a Long Island condo or smaller home
HUD says a HECM can buy a primary residence. You bring the difference between the HECM amount and the price plus closing costs, from savings, the sale of your current home or other approved sources, and you have to move in within 60 days of closing. It works for an existing or newly built one- to four-unit home where you occupy one unit, or an FHA-approved condo. If you’re moving to a condo, including one in a 55+ community, check that it’s FHA-approved first. If you are downsizing, I can compare it with a home purchase loan on Long Island. HUD has posted handbook revisions effective November 10, 2026, so confirm current rules.
Jumbo (proprietary) reverse mortgages and New York rules
DFS describes two types of reverse mortgage in New York: the HECM and the proprietary reverse mortgage under Real Property Law Section 280 or 280-a, both covered by the state’s Part 79 rules. Proprietary loans are not FHA-insured; the CFPB says they are typically designed for higher home values, and DFS says they have no loan cap, involve no government agency, and lenders are not required to offer them. If your home is worth well over the $1,249,125 HECM limit, I’ll check what the lenders I work with offer and compare it with a HECM.
New York adds its own protections: full disclosure of fees and terms before closing; 3 days to cancel after you sign a commitment and, on most reverse mortgages, 3 business days after closing (per the CFPB); the option to name someone to get notices; and no phone applications or pressure.
Reverse mortgages in Nassau, Suffolk, New York City and Westchester
The HECM rules don’t change by county. The tax bill, the kind of home and its value do.
HECM mortgages in Nassau County and Suffolk County
On Long Island the property tax bill is the big one. Whether you’re in Garden City, Massapequa, Smithtown or Brookhaven, it drives the lender’s review and any tax set-aside. On the North Shore, from Manhasset to Huntington, and on the East End, many homes are worth more than the HECM limit, so I also check jumbo reverse loans. A Hamptons or North Fork second home won’t qualify; it has to be where you live most of the year.
HECM mortgages in Brooklyn, Queens, Staten Island, Manhattan and the Bronx
One- to four-family houses, common in Queens, Brooklyn, Staten Island and the Bronx, can qualify for a HECM if you live in one unit. Condos need FHA approval. Co-ops, the norm in Manhattan, can’t get a HECM; see co-ops and condos above for what can work. Shoreline homes may need flood insurance.
Reverse mortgages in Westchester, Rockland and Putnam
Westchester tax bills run high, like Long Island’s, so the same set-aside question comes up. A co-op in Yonkers, White Plains or New Rochelle can’t get a HECM, same as in the city. Higher-value homes in all three counties may point to a jumbo reverse loan. I’m licensed throughout New York State.
Alternatives and red flags
The CFPB suggests weighing waiting, a home equity loan or line of credit (HELOC), refinancing, downsizing or lowering expenses. HELOC payments are often significantly higher once repayment begins, and the CFPB warns that if you fall behind you could lose your home. See my guides to refinancing a mortgage on Long Island and Long Island mortgage loan programs.
Red flags: a contractor pitching a reverse mortgage for repairs, ads implying VA approval (the CFPB notes the VA does not offer reverse mortgage loans), anyone charging for information HUD gives free, and pressure to sign fast or leave family or an attorney out.
Step by step
- Set goals together, including any spouse who would not be a borrower.
- Compare alternatives: a refinance, home equity line or sale against a HECM.
- Complete HUD-approved counseling.
- Apply with a DFS-authorized lender.
- Have your own attorney review the documents, as the New York Attorney General advises.
- Stay current on taxes, insurance and upkeep.
I’m a mortgage loan originator with Scott Capital Group; we do not make or fund loans. I can walk your family through a HECM and the alternatives; a call is a conversation, not an application. Read more about my background.
Frequently asked questions
How old do you have to be to get a reverse mortgage on Long Island?
For a HECM, the youngest borrower must be 62 or older at loan closing. New York's DFS says reverse mortgages are generally available to homeowners 60 or older, with a higher age for certain types.
Do I still pay property taxes and insurance with a reverse mortgage?
Yes. Property taxes, insurance and upkeep remain your responsibility, and leaving property charges unpaid can make the loan due and lead to foreclosure.
Is counseling required before a reverse mortgage?
Yes. HECM counseling with a HUD-approved counselor is required and, DFS says, cannot be waived. You can start from HUD's HECM page.
When does a HECM have to be repaid?
When a borrower dies and the home is not a surviving borrower's principal residence, or when all title is conveyed. With HUD approval, also if no borrower lives there as a principal residence, property charges go unpaid or another obligation is not met.
What happens if the loan balance grows larger than the home's value?
The borrower has no personal liability for the balance; the lender may enforce the debt only through sale of the property. HUD says heirs may sell for at least 95 percent of the current appraised value, and the lender will accept the net proceeds.
Is there a jumbo reverse mortgage for Long Island homes worth more than the HECM limit?
Sometimes. Proprietary reverse mortgages, often called jumbo reverse mortgages, are typically designed for higher-value homes, but they are not federally insured and lenders are not required to offer them. A HECM counts your home’s value only up to the 2026 limit of $1,249,125.
How much money can I get from a reverse mortgage?
HUD bases it on the youngest borrower’s age (or an eligible non-borrowing spouse’s), the interest rate and your home’s value, counted only up to the HECM limit. Any mortgage you still have is paid off first, and closing costs usually come out of the loan too, so what’s left for you is less than the total. Your HUD-approved counselor will go over the numbers with you, and so will I.
Do I have to make monthly payments on a reverse mortgage?
No monthly mortgage payment is required, but you keep paying property taxes, insurance, any condo or HOA charges and upkeep, and the home has to stay your principal residence. The balance grows as interest and FHA mortgage insurance (which protects the lender, not you) are added, and falling behind on those charges can make the loan due and lead to foreclosure. You can pay some or all of it back at any time with no prepayment penalty.
Is reverse mortgage money taxable, and does it affect Social Security or Medicaid?
The IRS says reverse mortgage payments are loan proceeds, not income, so they aren’t taxable. HUD says a HECM doesn’t affect basic Social Security or Medicare, but money you hold past the month you receive it can count against need-based benefits like Supplemental Security Income (SSI) or Medicaid. Ask a tax professional or an attorney who handles Medicaid planning before you draw.
What are the downsides of a reverse mortgage?
The balance grows every month, because interest and FHA mortgage insurance are added to it, so your equity shrinks. Upfront costs can be high. You still owe property taxes, insurance and upkeep, and falling behind on them can make the loan due. There’s usually less left for your estate, too. That’s why counseling comes first, and why I compare a HECM with a refinance, a home equity line or selling before you decide.
Can you get a reverse mortgage on a co-op in New York City or on Long Island?
Not a HECM: FHA won’t insure one on a co-op. New York does allow a proprietary reverse loan secured by co-op shares, but lenders don’t have to offer one. Ask me and I’ll check whether a lender I work with does.
Do you need a lawyer to close a reverse mortgage in New York?
Yes. New York law requires your own attorney at a reverse mortgage closing, someone who represents you, not the lender.
Sources
- HUD, FHA Reverse Mortgage for Seniors (HECM).
- HUD, Mortgagee Letter 2025-22, 2026 Home Equity Conversion Mortgage (HECM) Limits.
- HUD, Inheriting a Home Secured by an FHA-insured HECM (fact sheet, 9/2019).
- HUD, Handbook 4000.1, Update 18 (property eligibility; mortgage insurance premiums; payment plans and first-year limit; set-asides; heirs; HECM for Purchase).
- HUD, Housing Counseling Program Handbook 7610.1 (HECM counseling fees; effect on public benefits).
- eCFR, 24 CFR 206.19, Payment options.
- eCFR, 24 CFR 206.25, Calculation of disbursements (first-year limit; line of credit growth).
- eCFR, 24 CFR 206.27, Mortgage provisions (due and payable; no personal liability).
- eCFR, 24 CFR 206.205, Property charges.
- eCFR, 24 CFR 206.31, Allowable charges and fees.
- eCFR, 24 CFR 206.33, Age of borrower.
- eCFR, 24 CFR 206.37, Credit standing (financial assessment).
- eCFR, 24 CFR 206.41, Counseling.
- eCFR, 24 CFR 206.55, Deferral of due and payable status for Eligible Non-Borrowing Spouses.
- eCFR, 24 CFR 206.125, Acquisition and sale of the property (heirs’ options; 95% rule).
- eCFR, 24 CFR 206.209, Prepayment.
- eCFR, 24 CFR 206.3, Definitions (principal limit; principal residence).
- CFPB, Can anyone take out a reverse mortgage loan?.
- CFPB, What is a reverse mortgage?.
- CFPB, Are there different types of reverse mortgages?.
- CFPB, What is a home equity line of credit (HELOC)?.
- NYS Department of Financial Services, Reverse Mortgages.
- NYS Department of Financial Services, Reverse Mortgage Lending Authority.
- Cornell LII, 3 NYCRR 79.3, Authority to make reverse mortgage loans.
- Cornell LII, 3 NYCRR 79.11, Prohibited conduct.
- NYS Senate, Real Property Law Section 280-b (attorneys at closing).
- New York State Attorney General, Homeowners.
- IRS, FAQs: For senior taxpayers (reverse mortgage payments).
- OneKey MLS, Footprint Round-Up, September 22, 2026 (August 2026 data).
- Nassau County, Assessment Review Calendar.
- Suffolk County, Real Property Tax Service Agency FAQs.
- NYS Department of Taxation and Finance, Grievance procedures.
- NYS Department of Taxation and Finance, STAR eligibility.
- NYS Department of Taxation and Finance, It’s getting easier to qualify for STAR (STAR program changes).
This page is general information, not a commitment to lend or a rate quote. Loan programs, limits and requirements change and are subject to eligibility, credit and property approval, and lender underwriting. Kevin deNeergaard, NMLS #2450179; Scott Capital Group, NMLS #876527. Registered Mortgage Broker – NYS Department of Financial Services. All mortgage loans arranged with third-party providers. This page is not from HUD or FHA and was not approved by HUD or any government agency. Equal Housing Opportunity.