Banks that offer reverse mortgages, and who doesn't
Most traditional banks do not offer reverse mortgages. The lenders who do are usually mortgage companies, credit unions, and non-bank financial firms that specialize in this product. Bank of America, Wells Fargo, and Chase have largely exited the reverse mortgage market in recent years, though some regional banks and credit unions still participate. The largest reverse mortgage lender in the United States is currently Reverse Mortgage Funding LLC, followed by companies like American Advisors Group and Longbridge Financial.
A reverse mortgage is a loan available to homeowners age 62 and older that lets you borrow against your home's equity without making monthly payments. The loan is repaid when you sell the home, move out permanently, or pass away. Because the product is specialized and carries higher costs than a standard mortgage, most mainstream banks have decided the volume does not justify the compliance and servicing burden.
The lenders who remain active in reverse mortgages tend to be firms built around this single product line, or credit unions serving their own members. This concentration means fewer choices for borrowers, but it also means the remaining lenders have deep experience with the process and the rules that govern it.
Key Takeaways
- Most major banks including Bank of America, Wells Fargo, and Chase no longer originate reverse mortgages, though some regional banks and credit unions still do.
- Reverse Mortgage Funding LLC, American Advisors Group, and Longbridge Financial are among the largest active lenders in this market.
- All reverse mortgage lenders must be approved by the Federal Housing Administration (FHA) and follow strict rules about counseling and disclosure.
- You can search for FHA-approved lenders on the HUD website or ask your bank whether they work with reverse mortgage partners.
- Costs for reverse mortgages are higher than standard mortgages and include origination fees, insurance premiums, and closing costs that vary by lender.
How to find an FHA-approved reverse mortgage lender
All reverse mortgages must be insured by the Federal Housing Administration (FHA) under a program called the Home Equity Conversion Mortgage (HECM). This means every lender offering a reverse mortgage must be FHA-approved. You can search the official list of approved lenders on the HUD website at hud.gov. The search tool lets you filter by state and see which lenders are currently active in your area.
You can also contact your own bank and ask whether they originate reverse mortgages or have a partner lender they refer customers to. Some regional banks and credit unions maintain relationships with reverse mortgage specialists and can make an introduction. This route can be useful if you have a long relationship with your bank and want to start the conversation there, though you should still compare terms and costs across multiple lenders before committing.
When you contact a lender, they should provide you with a Loan Estimate within three business days. This document shows the interest rate, all fees, and the projected loan balance over time. Comparing Loan Estimates from at least two or three lenders is the standard way to understand the cost differences between them.
What to expect from a reverse mortgage lender
Before a reverse mortgage closes, you must complete counseling with a HUD-approved counselor. This counselor is independent of the lender and is required to review the loan terms, explain alternatives, and discuss the financial implications. The counselor will provide you with a certificate of completion, which the lender needs before they can proceed. This counseling is free or low-cost and typically takes one to two hours.
The lender will order a home appraisal to determine your home's current value, because the amount you can borrow depends on your age, the interest rate, and your home's equity. They will also verify that you own the home outright or have a small remaining mortgage balance that will be paid off with the reverse mortgage proceeds.
Closing typically takes 30 to 45 days from the time you submit your application. During this period, the lender will order the appraisal, you will complete counseling, and the lender will process your documents. You will sign closing papers at a title company or attorney's office, and the lender will fund the loan. The money can be delivered as a lump sum, a line of credit, monthly payments, or a combination of these.
Costs and fees charged by reverse mortgage lenders
Reverse mortgage costs are significantly higher than a standard mortgage because the lender assumes the risk that you will not make payments and that the loan balance may exceed the home's value when it comes due. Typical costs include an origination fee (usually 1 to 2 percent of the loan amount), an upfront mortgage insurance premium (about 2 percent of the loan amount), and closing costs such as appraisal, title search, and recording fees.
Interest rates on reverse mortgages vary by lender and by the type of rate you choose. Some lenders offer fixed rates, which lock in your rate for the life of the loan. Others offer adjustable rates, which can change monthly or annually based on an index. Adjustable rates are typically lower at the start but carry the risk of increasing over time.
The total cost of a reverse mortgage can range from 7 to 10 percent of the loan amount when you add origination fees, insurance, and closing costs together. This is why comparing multiple lenders and understanding the full cost picture before signing is important. Some lenders may offer lower origination fees but higher insurance premiums, or vice versa, so the total cost is what matters.
Credit unions and regional banks that offer reverse mortgages
Some credit unions have remained active in the reverse mortgage market, particularly those serving older members or those with assets large enough to support a specialized lending program. Examples include Navy Federal Credit Union, which offers reverse mortgages to its members, and some state-based credit unions. If you are a member of a credit union, it is worth asking whether they offer this product or can refer you to a partner lender.
Regional banks in certain states have also maintained reverse mortgage programs. These lenders often have deep roots in their communities and may offer more personalized service than national companies. However, availability varies widely by state and by the bank's current business strategy. The HUD lender search is the most reliable way to see which banks and credit unions are active in your specific area.
Working with a credit union or regional bank can sometimes result in lower fees or more flexible terms, but you should still compare their offers against national lenders. The difference in total cost between lenders can be substantial, so shopping around is always worthwhile regardless of the lender's size or type.
What happens if you want to refinance or change lenders
If you already have a reverse mortgage and want to refinance into a new loan with different terms or a lower rate, you will need to work with an FHA-approved lender again. The process is similar to the original loan: you will need a new appraisal, new counseling, and a new set of closing costs. Refinancing makes sense only if the new loan's terms are significantly better and the closing costs are low enough that you will recover them within a reasonable timeframe.
You cannot simply switch your existing reverse mortgage from one lender to another without refinancing. The loan is tied to your home and your original lender's servicing agreement. If you want to change lenders, you must pay off the existing loan in full and take out a new one. This is why choosing your lender carefully at the start is important.
Some lenders offer streamlined refinancing programs with reduced documentation and lower closing costs if you are refinancing a reverse mortgage you already have. Ask your current lender or prospective new lenders whether they offer this option, as it can save you money if you decide to refinance.
Frequently Asked Questions
Can I get a reverse mortgage from my regular bank?
Most major banks no longer offer reverse mortgages. You can ask your bank whether they have a partner lender or can refer you to one, but you will likely need to work with a specialized reverse mortgage company. Check the HUD lender search to see which lenders are approved in your state.
What is the difference between a bank and a non-bank reverse mortgage lender?
Banks are regulated by banking authorities and may have stricter lending standards, while non-bank lenders are regulated by state and federal mortgage authorities. Both types must be FHA-approved. The main difference is usually in customer service style and fee structure rather than loan quality or safety.
Do all reverse mortgage lenders charge the same fees?
No. Origination fees, insurance premiums, and closing costs vary significantly between lenders. This is why comparing Loan Estimates from multiple lenders is essential. A difference of 1 to 2 percent in total fees can mean thousands of dollars over the life of the loan.
What if a lender I found online is not on the HUD list?
Do not work with them. All legitimate reverse mortgage lenders must be FHA-approved and appear on the HUD lender search. If a lender is not on that list, they are either not approved or no longer active. Using an unapproved lender puts you at legal and financial risk.
Can I change lenders after I have already started the reverse mortgage process?
Yes, but only before you close. Once the loan closes, you are locked into that lender unless you refinance into a new loan with a different lender. If you are in the early stages and want to compare other lenders, you can pause the process and start fresh with someone else.