Reverse Mortgage Counseling Funding Under Threat
Homeowners 62 and older seeking a HECM may find required counseling harder to access and more expensive if federal funds lapse.
Updated on Nov. 6, 2026 in Residential
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The National Reverse Mortgage Lenders Association (NRMLA) has asked Congress to restore federal funding for HUD housing counseling, which reverse mortgage borrowers must receive before a Home Equity Conversion Mortgage (HECM) can close. Without that funding, counseling could become harder to obtain and more costly for older homeowners.
Why it matters
Federal law requires every prospective HECM borrower to complete independent counseling from a HUD-approved agency before the loan can close, and the counseling certificate is mandatory. Because lenders cannot pay for the session, steer borrowers to an agency, or use an affiliated counselor, the counseling system depends on appropriated federal dollars to stay in place for homeowners considering the program.
NRMLA's letter of November 6, 2026 urges Congress to restore HUD housing counseling funds. NRMLA members originate more than 90% of reverse mortgages, so the funding question touches nearly the entire HECM market.
The players
National Reverse Mortgage Lenders Association (NRMLA)
A trade association representing more than 300 member companies and more than 2,000 member delegates, whose members originate more than 90% of reverse mortgages.
U.S. Congress
The federal legislature that controls the appropriations needed to restore HUD housing counseling funding.
U.S. Department of Housing and Urban Development (HUD)
The federal agency that approves the housing counseling agencies required for HECM borrowers and administers the program's counseling requirement.
The details
Under Section 255 of the National Housing Act, a borrower must receive counseling from a HUD-approved agency before a HECM loan can close, and a certified counselor must issue the certificate that makes the closing legal. Lenders are barred from paying for that session, directing borrowers to a particular agency, or using a counselor affiliated with the lender. The counseling requirement therefore relies on a separate, independent system that federal appropriations help keep running.
Timeline
November 6, 2026: NRMLA sends a letter urging Congress to restore HUD housing counseling funds.
The Home Front
The counseling mandate under Section 255 of the National Housing Act is the gatekeeper for every HECM closing, so funding for HUD-approved agencies sits upstream of the federally insured reverse mortgage market. Any gap in that counseling capacity would ripple directly into loan closings for older homeowners tapping home equity.
If you are a homeowner aged 62 or older considering a reverse mortgage, expect to complete HUD-approved counseling before any loan can close, and budget for the session's cost since lenders cannot pay for it. Confirm with a HUD-approved counseling agency or a licensed loan professional that counseling is available before you plan around a reverse mortgage.
The takeaway
Reverse mortgage counseling is a required, independent step, and its availability depends on federal funding that is currently under request. If you are weighing a HECM, check with a HUD-approved counselor early and ask a licensed professional how any funding changes could affect your timing.
Further reading
For background on how these loans work, see the Residential real estate coverage.
Source note: This article includes information reported by HousingWire.
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