Can You Get a Reverse Mortgage on a Home Worth More Than $1.2 Million?
Yes. A homeowner with a $3 million house can take a reverse mortgage. But the FHA-insured HECM will only count $1,249,125 of that value in 2026, no matter what the appraisal says. Every dollar of value above the cap is invisible to the HECM formula. A jumbo reverse mortgage counts the full appraised value instead, goes up to roughly $4 million, and can start at age 55. For homes above about $1.5 million, that difference is usually worth more than the lower fees a HECM carries.
The Cap Is Not a Price Limit
People hear "$1,249,125 limit" and assume their home is too expensive to qualify. It is not a maximum home price. It is a maximum counted value.
The HECM formula takes your age, current rates, and your home's value, then computes what you can draw. The cap simply substitutes $1,249,125 wherever your real value would go.
What That Means in Practice
A 72-year-old with a $1.25 million home and a 72-year-old with a $4 million home get the same HECM offer. Identical. The second homeowner has $2.75 million of equity the program refuses to look at.
That is the entire argument for jumbo, and it is why this comes up constantly in Beverly Hills, Newport Beach, Montecito and Palos Verdes, where the median home passed the cap years ago.
When Jumbo Wins
- Your home is worth more than about $1.5 million.
- You are between 55 and 61, so a HECM is not available to you yet.
- You want a large lump sum rather than a slow line of credit.
When the HECM Still Wins
Do not assume bigger is better. The HECM carries FHA insurance, and that buys three things jumbo programs may not match:
- A growing line of credit. The unused portion of a HECM credit line grows over time. That is a genuine advantage nothing else replicates.
- Non-recourse backed by FHA. Most jumbo programs are non-recourse too, but the guarantee comes from the lender, not the federal government.
- Federal protections for a non-borrowing spouse.
If your home is close to the cap, say $1.3 million, the HECM often still wins on net. The gap has to be wide before jumbo pulls ahead.
How to Tell Which One Pays You More
Run both. Any broker who quotes you one product without showing the other is not doing the work. The comparison takes an afternoon and the difference on a $2 million home is routinely six figures.