Texas Reverse Mortgages

Reverse mortgages in Texas: what a HECM does and what Texas adds

A reverse mortgage lets a Texas homeowner who is 62 or older turn part of their home equity into cash without a monthly mortgage payment. Texas is different from most states because its constitution writes extra protections for homestead owners directly into the rules for reverse mortgages, including a mandatory waiting period and counseling for both spouses. A reverse mortgage is still a loan, though. Interest and insurance are added to the balance every month, and you keep paying property tax, insurance, and upkeep for as long as you live in the home. Summit Lending LLC (NMLS 2394434) is a mortgage broker licensed in Texas. We explain the federal rules, the Texas requirements, and the Texas tax breaks for seniors that interact with them, and we encourage families to be part of the conversation.

Most reverse mortgages are Home Equity Conversion Mortgages, or HECMs, insured by the Federal Housing Administration. This page focuses on HECMs and uses the 2026 federal limits.

Summit Lending LLC, NMLS 2394434, is based at 4542 W 14800 N, Garland, UT 84312 and serves borrowers in Utah, Texas, Idaho, Wyoming, Arkansas, and Arizona. Call 385-200-1470 or email [email protected].

The basics

• Age and occupancy. The borrower or the borrower's spouse must be 62 or older, and the home must be your Texas homestead and principal residence (Texas Constitution, Section 50(k); CFPB on reverse mortgages).
• No monthly mortgage payment. Interest and mortgage insurance are added to the balance instead, so what you owe grows over time.
• You keep the title. You still own the home and remain responsible for property tax, homeowners insurance, HOA dues, and maintenance. Falling behind on those can put the loan in default (CFPB).
• No personal liability. Texas requires reverse mortgages to be made without recourse against the owner or spouse personally, so the debt is repaid from the home, not your other assets (Texas Constitution).
• When it is repaid. The loan usually comes due when the last borrower dies, the home is sold, or all borrowers stop living there for more than 12 consecutive months without the lender's approval.

What the Texas Constitution adds

Section 50(k) of Article XVI of the Texas Constitution defines what a reverse mortgage on a Texas homestead must look like (Texas Constitution, Article XVI, Section 50). The parts that change your timeline and paperwork:

• Counseling for both spouses. The borrower and the borrower's spouse must attest in writing that they received counseling on reverse mortgages and other options. The counseling must be completed no earlier than 180 days and no later than 5 days before closing.
• A 12-day waiting period. The lender must give you a written notice, on a separate document that you both sign, describing your obligations and when the lender can foreclose. The loan cannot close before the 12th day after that notice is provided.
• Written consent. The lien has to be voluntary, with the written consent of each owner and each owner's spouse.
• Notice and time to cure. If a problem such as unpaid taxes or lapsed insurance comes up, the lender must give written notice and time to fix it before starting foreclosure.

In practice, plan on at least two weeks between the Texas notice and closing, and schedule counseling early so it does not expire. A non-borrowing spouse should attend counseling too.

2026 HECM limits and insurance

For 2026, the HECM maximum claim amount is $1,249,125 in every county, up from $1,209,750 in 2025 (HUD Mortgagee Letter 2025-22). The maximum claim amount is the lower of your appraised value or that limit. FHA charges an upfront mortgage insurance premium of 2% of the maximum claim amount and an annual premium of 0.5% of the outstanding balance (HUD Mortgagee Letter 2017-12).

A Texas example. Redfin put the statewide median sale price at about $329,054 for September 2026 (Redfin Texas data). On a home appraised at $330,000, the upfront premium would be about $6,600. On a larger home in Austin or Dallas appraised above the limit, the premium is capped at 2% of $1,249,125, about $24,982. Most borrowers finance the premium and other closing costs into the loan, which reduces the cash available but avoids paying them out of pocket.

How much you can receive depends on the age of the youngest borrower (or eligible non-borrowing spouse), the expected interest rate, and the maximum claim amount. Older borrowers and lower rates generally mean more available proceeds. Rates are higher than a year ago: the 30-year fixed survey average was 7.40% for the week of October 8, 2026, versus 6.30% a year earlier (AP report on the Freddie Mac survey; Freddie Mac PMMS). For the same home and age, proceeds are generally lower than they would have been last year.

How you can take the money

Federal HECM rules set out the payment options (24 CFR 206, Subpart B):

• Term. Equal monthly payments for a fixed number of months.
• Tenure. Equal monthly payments for as long as the loan stays in good standing and you live in the home.
• Line of credit. You draw money when you want it, up to your available limit.
• Modified term or modified tenure. Monthly payments combined with a line of credit.
• Single lump sum. One payment at closing. This is the only option for a fixed-rate HECM.

Any existing mortgage or home equity loan must be paid off from the proceeds first. If required repairs are found, the lender sets aside 150% of the estimated cost. If the financial assessment shows a risk that taxes or insurance could go unpaid, the lender can set aside part of your funds to pay them for you (24 CFR 206.19). In Texas, where property tax is often the largest housing cost, that set-aside can be substantial.

Texas property tax breaks for seniors, and how they fit

Texas homeowners 65 and older have several property tax protections. A reverse mortgage does not remove them, as long as the home stays your homestead, but they change how much cash you need each year.

• Bigger school exemptions. In November 2025, Texas voters raised the general school district homestead exemption to $140,000 (Proposition 13) and the extra exemption for owners 65 and older or disabled from $10,000 to $60,000 (Proposition 11). Together, up to $200,000 of value can be exempt from school taxes (Ballotpedia, Proposition 13; Ballotpedia, Proposition 11; Texas Comptroller).
• School tax ceiling. Once you qualify for the 65 or older exemption, the school taxes on your homestead are generally capped at the amount you paid in the year you qualified, unless you make improvements (Texas Comptroller).
• Tax deferral. Homeowners 65 or older or disabled can defer property taxes on their homestead under Texas Tax Code Section 33.06. Deferred taxes still accrue interest and must be paid when the home is sold or the owner dies (Texas Tax Code Chapter 33). The Texas reverse mortgage notice itself warns that the lender can foreclose if you do not pay taxes, even if you are eligible to defer them (Texas Constitution). In other words, plan on paying property taxes with a reverse mortgage.

File for the 65 or older exemption with your appraisal district as soon as you qualify. If you have not filed yet, do it before you apply, since it lowers the tax line in the lender's financial assessment.

What families should understand

The CFPB puts it plainly: a reverse mortgage is not free money. The balance rises while equity falls, and the loan is usually repaid by selling the home once the last borrower no longer lives there (CFPB). Any equity left after repayment belongs to you or your heirs. Heirs can also pay off the loan and keep the home. The CFPB also warns about scams, including contractors who push a reverse mortgage to pay for repairs they are selling. A legitimate HECM always starts with independent counseling.

How a Texas reverse mortgage moves

1. Counseling. You and your spouse meet with a HUD-approved HECM counselor who is independent of the lender, between 5 and 180 days before closing (HUD HECM overview; find counselors through HUD housing counseling).
2. Application, financial assessment, and the Texas notice. The lender reviews credit, income, and your ability to keep paying taxes and insurance, and gives you the signed Texas notice. The 12-day clock starts then.
3. Appraisal. An FHA appraisal sets the value. With the youngest borrower's age and the rate, it determines how much is available.
4. Closing and the right to cancel. For most reverse mortgages you have three business days after closing to cancel (CFPB). After that, you keep up with taxes, insurance, and maintenance for the life of the loan.

Other Texas details

• Insurance. Homeowners insurance must stay in force, and Texas premiums run high because of hail, wind, and hurricanes. Flood insurance is required if the home is in a high-risk flood zone. Budget for premiums rising over time.
• HOA dues. Unpaid association dues can create a lien, so treat them like taxes.
• Buying a new home. A HECM for Purchase lets you buy a home that fits retirement better, using a reverse mortgage plus a down payment. Texas rules allow reverse mortgages for the purchase of a homestead you will occupy.
• Veterans. The VA does not offer reverse mortgages. Veterans who want one use a HECM or a private product.

Is a reverse mortgage right for you?

It can make sense if you plan to stay in your home for many years, have significant equity, and want to reduce monthly costs or build a cushion. It may not fit if you expect to move soon, want to leave the full value of the home to heirs, or would struggle to keep paying taxes and insurance. Alternatives include downsizing, a traditional Texas refinance, the Texas tax deferral, or a home equity loan. Talk to us and to a counselor before deciding (CFPB guide).

Where we help Texas homeowners

Major cities: Houston, Dallas, Austin, Fort Worth, El Paso, Plano, Lubbock, and Amarillo. Houston area: Harris County, Fort Bend County, Montgomery County, Katy, and Sugar Land. Dallas and Fort Worth area: Dallas County, Tarrant County, Collin County, and Denton County. Central and South Texas: Travis County, Williamson County, Bexar County, New Braunfels, and Kerrville.

Related pages

See Utah reverse mortgages, Idaho reverse mortgages, Wyoming reverse mortgages, or the national reverse mortgage page. For Texas, the Texas mortgage overview, Texas mortgage calculator, Texas purchase loans, and Texas preapproval cover the rest.

Sources

• CFPB, What is a reverse mortgage?
• Texas Constitution, Article XVI, Section 50
• HUD Mortgagee Letter 2025-22, 2026 HECM limits (PDF)
• HUD Mortgagee Letter 2017-12, HECM premiums (PDF)
• HUD HECM origination and servicing overview (PDF)
• 24 CFR Part 206, Subpart B, HECM eligibility and payment options (PDF)
• HUD housing counseling
• Redfin, Texas housing market
• AP via WTOP, Freddie Mac rates for Oct 8, 2026
• Freddie Mac Primary Mortgage Market Survey
• Ballotpedia, Texas Proposition 13 (2025)
• Ballotpedia, Texas Proposition 11 (2025)
• Texas Comptroller, property tax exemptions
• Texas Tax Code Chapter 33 (Section 33.06 tax deferral)

Information on this page is for general education and is current as of October 2026. It is not a commitment to lend or a rate quote. Program rules, limits, and availability change, and approval depends on your credit, income, assets, property, and lender guidelines. Summit Lending LLC, NMLS 2394434. Equal Housing Opportunity.