HECM Counseling Requirements: What Borrowers Need to Know

Most people hear the words “required counseling” and assume it is a box to check before the lender can move forward.

That assumption undersells it.

HECM counseling is a federally required one-on-one session with an independent expert who ensures you understand before you sign anything.

The process gives you direct access to a HUD-certified counselor who cannot sell you a loan, cannot represent a lender, and has no financial interest in your decision.

Their only obligation is to make sure you know what to expect before you go in, making the session significantly more useful.

What a HECM Is and Why Counseling Is Required

A reverse mortgage is a loan available to homeowners age 62 and older that allows access to home equity without required monthly mortgage payments.

The loan balance grows over time as interest and fees accumulate, and repayment happens when the borrower:

• Sells the home
• Moves out permanently
• Passes away

The most common reverse mortgage is the Home Equity Conversion Mortgage (HECM), a federally insured program backed by the Federal Housing Administration (FHA) under HUD.

Federal law requires every HECM borrower to complete a one-on-one counseling session with a HUD-certified counselor before any lender can process the application.

A reverse mortgage carries long-term consequences that affect:

• Remaining home equity over time
• Future housing options
• Heirs and what may remain in the property
• Ongoing obligations for taxes, insurance, and maintenance
• Eligibility for certain public benefits

A group information session does not satisfy this requirement. HECM counseling must be one-on-one.

Why the Counselor’s Independence Matters

HUD rules prohibit HECM counselors from recommending, promoting, or representing a specific lender or loan product.

The counseling agency must disclose any relationships with lending institutions in writing before the session begins, and lenders cannot steer borrowers toward a particular counselor or agency.

To appear on HUD’s roster, a counselor must:

• Pass HUD’s standardized HECM exam
• Complete ongoing training every two years
• Pass the exam again every three years.

HUD can remove counselors for:

• Promoting specific lenders
• Misrepresenting information
• Failing to cover required topics

The independence is structural and enforced.

How the Session Can Be Conducted

HECM counseling can take place in person, by phone, or virtually.

Agencies must make reasonable accommodations for disability-related needs and provide interpretation services when English is not the borrower’s primary language.

Agencies may charge a fee, but it must be reasonable and customary and cannot create a financial hardship.

What You Receive Before the Session

At least one day before the appointment, the agency sends an information packet that includes:

• The agency’s disclosure form and fee schedule
• A preparation guide for the counseling session
• Loan comparison printouts relevant to the borrower’s situation
• A Total Annual Loan Cost disclosure, known as a TALC
• A reverse mortgage amortization schedule
• The HUD-designated reverse mortgage booklet

If the lender has already quoted or provided the loan documents, bring them.

The counselor can help compare those documents during the session, though they cannot recommend which lender to choose.

The Four Areas Every HECM Counseling Session Must Cover

1. Alternatives to a Reverse Mortgage

Before reviewing anything about HECMs, the counselor must cover alternatives based on the borrower’s short and long-term needs, including:

• Other loan products
• Downsizing
• Assistance programs
• Other approaches to the underlying financial situation.

The goal is to determine whether a reverse mortgage is a better option than other available options.

2. Reverse Mortgage Basics

The counselor explains how the loan works in practice, covering:

• The loan must eventually be repaid
• How the balance grows, and equity decreases over time
• What events trigger repayment
• Ongoing obligations for property taxes and homeowners’ insurance
• How a non-borrowing spouse may be affected
• Mortgage insurance premiums and fees
• The non-recourse feature, meaning neither the borrower nor heirs can owe more than the home is worth
• How the title to the home is affected
• How the loan may affect public benefits, such as Medicaid
• What factors determine how much can be borrowed

3. Your Specific Financial Picture

Using HUD-designated calculation software independent of any lender’s system, the counselor works through numbers specific to the borrower’s situation, including:

• Cash available
• Upfront costs
• An individual amortization schedule
• Future projections
• Side-by-side comparisons of loan options or payment plans

4. Fraud Prevention and Elder Abuse Awareness

Every session must include a fraud prevention component covering:

• How mortgage fraud works
• Warning signs to watch for
• Risks of routing loan proceeds in unusual ways
• How to recognize predatory lending
• How to identify and report potential elder abuse

“HECM counseling gives every borrower an independent expert who reviews the full picture, runs the numbers, covers the alternatives, and has no financial stake in the outcome.” — Wade Betz, Winning With Wade | Mortgage Education and Strategy

How to Prepare

HUD instructs counselors to ask clients to come ready to discuss:

• Financial needs and goals,
• Future housing and financial needs of a spouse or partner
• Circumstances that led to considering a reverse mortgage
• Alternatives already explored

Documents worth having available:

• Any lender quotes or loan documents already received
• A recent mortgage statement if an existing balance remains
• The most recent property tax bill
• Homeowners insurance information
• Documentation for any public benefits currently received

What Happens After the Session

Once the session is complete, the counselor issues a HECM counseling certificate, HUD Form 92902, which the lender must have before processing the application.

The certificate confirms the required counseling was completed and does not indicate whether the counselor recommends the loan or advises against it.

The counselor is also required to follow up after the session, and access to the counselor and related resources continues afterward.

For borrowers facing imminent risk of losing their home or needing loan proceeds immediately for medical care, emergency HECM counseling is available without waiting for a standard appointment.

✅ HECM Counseling Preparation Checklist

• Choose a HUD-approved counselor or counseling agency
• Review the information packet before the session
• Gather lender quotes, mortgage statement, tax bill, and insurance information
• Prepare to discuss financial goals, housing plans, and alternatives already considered
• Bring documentation for any public benefits currently received
• Keep the counseling certificate once the session is complete

📣 Frequently Asked Questions

Is HECM counseling required for every reverse mortgage borrower?

Yes. Federal law requires a completed one-on-one session before any lender can process a HECM application.

Can a group seminar satisfy the counseling requirement?

No. The requirement is specifically one-on-one. Group sessions do not qualify.

Does the counselor work for the lender?

No. HUD rules prohibit HECM counselors from promoting or representing specific lenders or products.

Can HECM counseling be done by phone or online?

Yes. The session can be completed in person, by phone, or virtually. Interpretation services and reasonable accommodations must be provided when needed.

What does the counseling certificate mean?

It confirms the required counseling was completed. It does not represent a recommendation for or against the reverse mortgage.

What should I bring to HECM counseling?

Lender quotes, a recent mortgage statement, the most recent property tax bill, homeowners’ insurance information, and documentation for any public benefits currently received.

Will the counselor compare different lender quotes?

Yes, but they cannot recommend one lender over another.

Is emergency HECM counseling available?

Yes, for borrowers facing imminent loss of their home or urgent medical needs requiring faster access to loan proceeds.