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Proprietary Reverse Mortgages Capture Majority Market Share

Homeowners are opting for private-label loans over government-insured products to avoid upfront mortgage insurance premiums.

Updated on Oct. 20, 2026 in Residential

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Homeowners in the United States are increasingly selecting proprietary reverse mortgages to avoid the upfront costs associated with government-insured HECM loans. AI Illustration. Upload story photo >

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As of September 2026, proprietary reverse mortgage loans now account for over 60 percent of total market volume in the United States. This shift highlights a change in how homeowners utilize equity-release products as HECM originations continue to decline.

Why it matters

The rise of private-label loans is driven by higher interest rates, which incentivize borrowers to bypass the upfront mortgage insurance premiums required by government-backed HECM products. This shift changes the landscape for homeowners looking to access home equity as a financial tool.

Proprietary loan market share topped 60% in September 2026, while government-insured HECM volume dropped to $2.7 billion year-to-date, down from $3 billion during the same period in 2025. Additionally, providers like Mutual of Omaha have adjusted eligibility, lowering the minimum home valuation for SecureEquity products to $300,000.

The players

Federal Housing Administration

The federal agency that regulates and insures HECM reverse mortgages to provide financial protections for older homeowners.

Mutual of Omaha

A financial services provider that offers reverse mortgage products and recently lowered its minimum home valuation requirements.

The details

Proprietary reverse mortgages differ from Home Equity Conversion Mortgages (HECM) because they do not require an upfront mortgage insurance premium. Borrowers are increasingly opting for these private-label products as a strategy to mitigate the impact of higher interest rates. Lenders are also expanding accessibility, such as Mutual of Omaha reducing the minimum property value requirement to $300,000 to attract a broader segment of homeowners.

Timeline

  1. HECM volume totaled $3 billion during the first nine months of 2025.

  2. HECM volume totaled $2.7 billion during the first nine months of 2026.

  3. HECM originations reached $880 million in Q3 2026.

  4. Proprietary loan market share surpassed 60% in September 2026.

  5. Traders anticipate a 25-basis-point interest rate hike in December 2026.

The Home Front

The transition toward proprietary loans reflects a broader shift in housing-finance strategies as borrowing costs fluctuate. This trend marks a departure from the historical dominance of government-insured HECM products in the equity-release market.

Homeowners should compare the fee structures of proprietary loans versus HECM products, as the lack of an upfront mortgage insurance premium may lower initial costs. When considering an equity-release product, consult with a licensed financial advisor to understand how current interest rates impact your total debt burden.

The takeaway

The reverse mortgage market is evolving as homeowners seek alternatives to government-insured loans to lower upfront costs. If you are exploring these options, verify the eligibility requirements for different products, as minimum property values like the $300,000 threshold can vary by lender.

Further reading

For more on the current housing market, see our Residential section.

Source note: This article includes information reported by HousingWire.

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Would you trust a private reverse mortgage lender over a government-insured HECM loan?