What the calculator is doing
Four steps, and it is worth understanding them because they explain why two neighbours with identical houses get different answers.
- Cap the value. Your home's value, or the FHA lending limit of $1,249,125, whichever is lower. This capped figure is the maximum claim amount.
- Find your factor. HUD publishes a table crossing every age against every expected rate. The cell where they meet is your principal limit factor — the share of the maximum claim amount you can reach.
- Subtract what must be paid. Closing costs, then any existing mortgage. Both come out of the principal limit before you see a dollar.
- Apply the first-year cap. HUD limits year-one draws to 60% of the principal limit, or your mandatory obligations plus 10%, whichever is greater.
Why we show a range
Because a single number would be a lie dressed as precision. Your real figure depends on an appraisal nobody has done, an expected rate that is not locked until your FHA case number is assigned, and a financial assessment that has not been run. Any calculator producing an exact dollar amount is guessing at three variables and rounding confidently.
The range is honest about what is known. The call is what settles it.
Try this: drag the expected rate
Leave age and value alone and move the rate slider from 7.5% to 5%. On a typical file that swings the proceeds by tens of thousands of dollars. This is why timing an application to the rate environment matters more than most borrowers realise — and why the expected rate, not the note rate, is the number to ask about.
Age is the lever
At today's expected rates, roughly what share of a home's value the principal limit reaches:
| Age of youngest borrower | Approximate share of value | On a $500,000 home |
|---|---|---|
| 62 | ~29% | ~$145,500 |
| 65 | ~31% | ~$156,500 |
| 70 | ~35% | ~$175,000 |
| 75 | ~38% | ~$189,500 |
| 80 | ~43% | ~$213,500 |
| 85 | ~49% | ~$246,500 |
Principal limit before costs and any mortgage payoff. Illustrative only, at a representative expected rate — your figure depends on the rate in effect when your case number is assigned.
Three things the calculator cannot see
- What your home will actually appraise for. Zillow is not an appraisal, and on an FHA appraisal the difference is regularly five figures in either direction.
- Whether a LESA applies. If the financial assessment calls for a set-aside to cover taxes and insurance, your available cash drops and your risk of default drops with it.
- Whether this is a good idea for you. The arithmetic does not know you are planning to move in three years, or that your daughter is counting on inheriting the house. Those change the answer more than any input on this page.
What this estimate is, and what it is not
These figures are an illustration for planning only — not a loan offer, not a commitment to lend, and not a guarantee of what you will receive. Your real numbers depend on a completed appraisal, the expected interest rate on the day your FHA case number is assigned, your existing mortgage payoff, and a HUD financial assessment. A reverse mortgage is a loan that must be repaid, not a government benefit. You remain responsible for property taxes, homeowners insurance and upkeep, and the loan can become due if you stop meeting those obligations.