Advocates Sought Lower Reverse Mortgage Fees
The National Reverse Mortgage Lenders Association is pushing for a reduction in upfront costs for HECM borrowers.
Updated on Sept. 29, 2026 in Residential
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The National Reverse Mortgage Lenders Association is advocating for a reduction in the current 2% upfront mortgage insurance premium on federal reverse mortgages. This proposal aims to decrease borrowing costs for seniors, as current endorsement levels for the Home Equity Conversion Mortgage (HECM) program are tracking toward their lowest point since 2003.
Why it matters
Reverse mortgage borrowers are often more sensitive to upfront costs than ongoing rates, as they do not make traditional monthly payments. Reducing these fees is viewed by advocates as a critical step to increase access, as current premiums act as a significant financial deterrent.
The current upfront mortgage insurance premium is set at 2% of the home value or maximum lending limit of $1.25 million. Advocates propose dropping this to 0.5% for borrowers accessing 60% or less of their equity while slightly increasing annual premiums to ensure the fund remains sound.
The players
National Reverse Mortgage Lenders Association
The national trade association representing lenders and professionals involved in the HECM reverse mortgage market.
Department of Housing and Urban Development
The federal agency responsible for overseeing national housing policies and the administration of the HECM program.
Matt Jones
The nominee for FHA commissioner who is expected to work with industry groups on potential program changes.
The details
The industry proposal targets the HECM structure to encourage new originations after years of declining participation. By shifting the financial burden from a large, upfront lump sum to a smaller fee paired with an increased annual premium, lenders believe the program becomes more attractive to potential borrowers. This change would require regulatory action from the Department of Housing and Urban Development to implement.
Timeline
Late 2017 marked the elimination of risk-based pricing for the HECM program.
October 2025 saw the FHA cut multifamily mortgage insurance premiums by 25 basis points.
December 2025 was when NRMLA submitted formal program comments to HUD.
July 2026 provided data showing HECM endorsements on track for record lows.
September 2026 served as the nomination month for a new FHA commissioner.
The Home Front
Federal reverse mortgage programs have struggled with declining endorsement volumes since the FHA eliminated risk-based pricing in 2017. Current advocacy efforts seek to modernize the HECM and HMBS program to better align with the financial needs of modern homeowners.
If you are considering a reverse mortgage, consult with a licensed financial advisor to understand how current upfront premiums affect your specific loan principal. Keep track of potential policy changes from the FHA as the Senate considers the confirmation of the new commissioner.
The takeaway
The current push for lower upfront reverse mortgage premiums highlights a growing gap between federal program costs and borrower needs. Keep an eye on future FHA announcements regarding mortgage insurance, as shifts in these rates directly influence the net equity available to homeowners.
Further reading
Learn more about the latest shifts in home financing by visiting the Residential section.
Source note: This article includes information reported by HousingWire.
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Should the government lower upfront costs to encourage more seniors to use reverse mortgages?
