VA Reverse Mortgage: What Veterans Can Use in 2026

There is no VA reverse mortgage. The CFPB says it directly: "The Department of Veterans Affairs (VA) does not offer any reverse mortgage loans." What older veterans can use is FHA's Home Equity Conversion Mortgage (HECM), the federally insured reverse mortgage for homeowners 62 and older, and it can pay off an existing VA loan at closing. Whether it's the right move depends on your age, your equity, who else lives in the house, and what the VA-backed alternatives would cost you.

Does VA offer a reverse mortgage?

No. VA's home loan programs are a purchase loan, a cash-out refinance, the interest rate reduction refinance (IRRRL) and the Native American Direct Loan. None of them is a reverse mortgage. When an ad or a lender says "VA reverse mortgage," it usually means one of two things: an FHA-insured HECM marketed to veterans, or a private ("proprietary") reverse mortgage, which isn't a HECM and isn't covered by HUD's HECM rules.

The difference is real. A HECM is regulated under 24 CFR Part 206 and insured by FHA, with mandatory counseling and spouse protections written into the rules. A proprietary product follows whatever its contract says. If someone pitches you a reverse mortgage, ask what the program is called on the disclosures.

How a HECM works for a veteran with a VA loan

A HECM turns home equity into cash without a monthly mortgage payment. Per the CFPB, interest and fees are added to the balance each month, so what you owe grows over time and your equity shrinks. You still owe property taxes, homeowners insurance and upkeep.

If you still owe on a VA loan, that loan gets paid off first. The CFPB's eligibility page puts it this way: "If you have a mortgage balance, you must be able to pay it off when you close on the reverse mortgage." You can use your own money or HECM proceeds to do it. In practice, a large VA balance eats much of what the HECM can provide.

Who qualifies

From the federal regulation and the CFPB's eligibility list:

How much you can borrow

You can't borrow the full value of the house. HUD's regulation defines the maximum claim amount as the lesser of the appraised value, the sales price on a HECM for Purchase, or the national limit (24 CFR 206.3). For FHA case numbers assigned January 1 through December 31, 2026, HUD Mortgagee Letter 2025-22 sets that limit at $1,249,125, which is 150% of Freddie Mac's $832,750 national conforming limit.

What you can actually draw is the principal limit, which HUD calculates from the age of the youngest borrower (or Eligible Non-Borrowing Spouse), the expected interest rate, and the maximum claim amount. A lender's quote and your counseling session will show the number for your situation.

What a HECM costs in 2026

FHA charges two mortgage insurance premiums on a HECM. Under HUD Mortgagee Letter 2017-12, effective for HECMs with FHA case numbers assigned on or after October 2, 2017, the initial premium is "two percent (2.00%) of the Maximum Claim Amount" for every borrower, and the annual premium is "one-half of one percent (0.50%) of the outstanding mortgage balance." The annual premium isn't paid out of pocket. It's added to the balance along with interest.

On a $400,000 home, that works out to an $8,000 upfront premium, and about $500 a year of added premium for each $100,000 you owe. The bars below set the HECM premium beside the VA funding fee on the most common VA alternative, a cash-out refinance. Watch the base: HECM's 2% is charged on the home's value (up to the cap), while VA's fee is charged on the loan amount.

The VA figures come from VA's funding fee table: 2.15% for first use and 3.3% after first use on a cash-out refinance, regardless of equity. If you're refinancing a VA loan you already used your benefit on, plan on the after-first-use rate. Veterans receiving VA compensation for a service-connected disability don't pay a funding fee at all. The funding fee calculator runs your own numbers.

Your VA loan, entitlement and disability compensation

Paying off a VA loan with a HECM doesn't automatically hand your entitlement back. VA's eligibility page lets you restore used entitlement if you've repaid the prior loan in full but haven't sold the home, and "you can only do this once." You'd request it through a Certificate of Eligibility, online, through a lender, or on VA Form 26-1880.

For most HECM borrowers, that restoration is more theory than plan. A VA purchase loan is for a home you'll live in, and a HECM can come due once the house stops being your principal residence. Buying and moving to a new home would generally mean repaying the HECM. If restored entitlement matters to you, raise it in counseling before you close. Our VA entitlement calculator explains how full and partial entitlement are counted.

A disability rating matters more on the VA side of this decision. VA compensation for a service-connected disability waives the funding fee on a cash-out refinance, and in some states a rating can cut the property taxes a HECM requires you to keep paying. Our guide to disabled veteran property tax exemptions covers what six states ask for.

Compare a cash-out against keeping your loan

A VA-experienced specialist can walk through a VA cash-out refinance with your actual balance and equity. We're a referral service, not a lender. Free to start.

See my VA options

Protections for a spouse who isn't on the loan

This is the part that's easiest to miss, and the hardest to fix later. A spouse under 62 can't be a HECM borrower, because the youngest borrower must be 62 at closing. The regulation does offer that spouse a path to stay in the home, but only one that's set up at closing.

Under 24 CFR 206.55, a non-borrowing spouse qualifies for a Deferral Period after the borrower dies only if they:

1. were the borrower's spouse at closing and stayed married for the borrower's lifetime,
2. were disclosed to the lender and specifically named as an Eligible Non-Borrowing Spouse in the loan documents,
3. have lived in the home as their principal residence and keep doing so, and
4. within 90 days of the borrower's death, establish legal ownership or another legal right to remain in the home for life, and keep meeting the loan's other obligations, such as paying property charges.

The deferral lets the spouse stay. It doesn't let them keep drawing money: the regulation says disbursements can't continue during a Deferral Period. A spouse who doesn't meet the conditions at closing is an Ineligible Non-Borrowing Spouse, and the HECM becomes due when the last surviving borrower dies. Counselors are required to explain what happens to the spouse, and the spouse must attend counseling too.

Reverse mortgage scams aimed at veterans

The CFPB names the pattern: "Some mortgage ads falsely promise veterans special deals, imply VA approval, or offer a 'no-payment' reverse mortgage loan to attract older Americans desperate to stay in their homes." Red flags to watch for:

• VA seals or "VA-approved" language on a reverse mortgage mailer. In a 2015 CFPB post, VA's then home loan director said: "VA will never email or mail out solicitations for our loan program." He added: "VA does not endorse or sponsor any particular lender."
• "No payments ever." You owe no monthly mortgage payment, but you still owe taxes, insurance and upkeep, and not paying property charges can make the loan due.
• A contractor or "estate planner" who pushes the loan. The CFPB warns against contractors selling a reverse mortgage to pay for repairs, and HECM counselors must ask whether you've signed with an estate planning service firm.
• Pressure to sign fast. With most reverse mortgages you can cancel within three business days after closing. The CFPB says: "Within three business days after the loan is closed, you can cancel the deal for any reason, without penalty."

If an ad looks deceptive, you can file a complaint with the CFPB. For questions about your VA loan, you can reach a VA loan technician at 877-827-3702.

Alternatives to a reverse mortgage

VA cash-out refinance

VA's cash-out refinance replaces your current loan with a new one and lets you take cash from your equity. It can also refinance a non-VA loan into a VA-backed one. You need a Certificate of Eligibility, you have to meet VA's and the lender's credit and income standards, and you have to live in the home. Unlike a HECM, it comes with a monthly payment. Our VA cash-out refinance guide covers the 100% loan-to-value ceiling and the net tangible benefit tests.

Home equity loan or HELOC

There's no VA home equity loan, but you can put an ordinary home equity loan or line of credit behind a VA first mortgage. The CFPB describes a home equity loan as one that "allows you to borrow money using the equity in your home as collateral," and warns: "If you cannot pay back the HEL, the lender could foreclose on your home." This route keeps a low-rate VA loan in place, which a HECM or cash-out refinance won't.

If you're behind on your VA loan

A reverse mortgage isn't the only way out of missed payments. VA's Partial Claim Program lets VA work with your servicer to pay your missed payments and bring the loan current, and you repay the partial claim when you pay off the loan or sell. VA says you must first complete a 3-month trial payment plan, and that servicers have until November 28, 2026, to add partial claims to their systems. Call your servicer first; a VA loan technician at 877-827-3702 can also talk through the options.

Still working, or just leaving the service?

If you're years away from 62, this is a later problem, but the loan you carry into retirement is decided earlier. Our guide to a VA loan before retiring from the military covers how retired pay and a disability rating line up in your final year.

Bottom line

A VA reverse mortgage doesn't exist. If you're 62 or older and want to stop making a mortgage payment, an FHA HECM can pay off your VA loan, with 2% upfront and 0.50% annual mortgage insurance, mandatory counseling, and spouse protections that only work if they're set up at closing. If you'd rather keep a payment and keep more of your equity, a VA cash-out refinance or a second lien may fit better, and if you're behind on payments, ask your servicer about the Partial Claim Program first. To compare the VA-backed options against your actual balance, start with the 2-minute eligibility check.