Trade Group Sought Reverse Mortgage Premium Cuts
The National Reverse Mortgage Lenders Association urged HUD to lower upfront fees to boost HECM participation.
Updated on Sept. 29, 2026 in Residential
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The National Reverse Mortgage Lenders Association has formally requested that HUD reduce upfront mortgage insurance premiums for federally insured reverse mortgages. Industry advocates argue that lowering the current 2% fee would help reverse a decline in HECM endorsements.
Why it matters
Potential borrowers often view high upfront costs as a major deterrent since reverse mortgages do not require monthly payments. Industry leaders argue that reducing these barriers is necessary as HECM originations reach their lowest levels since 2003.
The HECM portfolio reported a capital ratio of 24.06% at the end of fiscal year 2025. Borrowers currently face an upfront insurance premium of 2% of the home's appraised value or the maximum lending limit.
The players
National Reverse Mortgage Lenders Association
This is the national trade organization that represents the reverse mortgage industry and advocates for program reforms.
Matt Jones
He is the nominee for FHA commissioner who faces a pending Senate confirmation process.
HUD
The Department of Housing and Urban Development is the federal agency responsible for overseeing national housing policy.
The details
The industry group proposes lowering the upfront fee to 0.5% for borrowers who withdraw 60% or less of their principal limit. To ensure the program remains actuarially sound, the association suggested raising the annual insurance premium to 0.5%.
Timeline
Late 2017: FHA eliminated risk-based pricing for HECMs.
October 2025: FHA cut multifamily mortgage insurance premiums by 25 basis points.
December 2025: NRMLA submitted comments to HUD regarding the HECM program.
September 2026: Matt Jones was nominated as FHA commissioner.
Culture Shift
This proposal reflects a broader move to adjust federal lending requirements to match current borrower behavior. It follows a pattern set by the FHA's multifamily premium cuts in late 2025 aimed at stimulating market activity.
Borrowers currently facing high upfront costs may see the feasibility of a reverse mortgage improve if the proposal to lower fees is adopted. These changes would directly impact the total principal available to homeowners choosing to participate in the program.
The takeaway
Prospective reverse mortgage borrowers should monitor potential policy changes that could reduce initial borrowing costs. Simplifying these financial structures is currently a top priority for industry advocates looking to improve long-term program sustainability.
What happens next
Matt Jones must undergo and pass the Senate confirmation process before he can formally assume the role of FHA commissioner.
Further reading
Learn more about the latest housing trends in the United States Residential section.
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