California's seven-day cooling off period
California adds a protection no other state we serve has, and it is a good one.
Seven days, and it cannot be compressed
A lender may not take a final and complete application, or charge you any fee, until at least seven days after you complete counseling. The clock starts when counseling finishes, not when you enquire.
The practical effect is that no Californian can be rushed from first conversation to signed application in a weekend. If anyone suggests a way around it, that is disqualifying information about them.
California also requires a specific plain-language disclosure before counseling, and lenders must provide a list of HUD-approved counseling agencies rather than steering you to one. We do not choose your counselor and receive no part of the fee anywhere, but in California it is also the law.
Proposition 13, and what Proposition 19 changed
California property tax works differently from every other state on this list. Proposition 13 caps the assessed value increase on a property at 2% a year for as long as you own it, so a homeowner who bought decades ago is often paying tax on a fraction of the current market value.
For a reverse mortgage borrower that is a meaningful advantage: the ongoing obligation that most often causes default is comparatively modest here relative to the home's value, provided you stay put. Selling and buying resets the assessment, which is a large part of why so many long-tenured California owners do not want to move — and a large part of why a reverse mortgage appeals.
Proposition 19 changed the inheritance side. A child inheriting the family home now generally keeps the low assessed value only if they make it their own principal residence, and even then within limits. If your plan assumed your children would inherit both the house and its Proposition 13 basis, that assumption needs rechecking — and it belongs in the same conversation as the reverse mortgage, because together they determine what your heirs actually receive. What happens to the home is here.
Many school districts exempt homeowners 65 and over from their parcel taxes, on application. The State Controller also runs a Property Tax Postponement programme for older homeowners, but it is closed to any home with a reverse mortgage — so the two cannot be combined, and an existing postponement lien is paid off at closing. Like North Carolina's deferment, it needs raising early.
What "enough equity" looks like in California
California has the highest values of any state we serve, and the $1,249,125 FHA lending limit binds constantly. A home worth $2 million is calculated by a HECM as though it were worth the limit — every dollar above is invisible to the programme.
That makes California the state where pricing a proprietary reverse mortgage alongside a HECM is not optional. Above roughly $2 million the jumbo usually wins on raw proceeds. Between the FHA limit and about $1.8 million the two land closer together than people expect, and the HECM brings FHA insurance and the growing line of credit with it. Get both quoted.
California is also a community property state, which affects how title and non-borrowing spouse status are handled. Get that right at application — it cannot be fixed afterwards. The non-borrowing spouse rules are here.
Counseling in California
California requires counseling to be completed at least seven days before a lender may take a final application or charge any fee. You may use any HUD-approved agency — we do not choose your counselor and receive no part of the fee. Find one at hud.gov/findacounselor or by calling 1-800-569-4287.
What the session actually covers, and how to get your money's worth from it.
The rest is the same everywhere
Beyond the above, a California reverse mortgage works the way it works nationally. You keep the title. There is no monthly mortgage payment for as long as you live there and meet your obligations. The loan is non-recourse, so neither you nor your heirs can ever owe more than the home sells for. Any existing mortgage is paid off at closing unless you use a second-lien product.
- How a reverse mortgage actually works
- Whether you qualify
- What it costs
- Every option compared, including the ones we do not sell
Licensed in California
Robert Erath, NMLS #297076, is licensed to originate in California through United Mortgage Corp, NMLS #1330. Verify either licence independently at nmlsconsumeraccess.org — you should do that with every originator you speak to, not just this one.
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.