What is a Proprietary Reverse Mortgage?

Proprietary Reverse Mortgage Definition

A proprietary reverse mortgage is any type of reverse mortgage issued by a lender without FHA-insurance. The vast majority of reverse mortgages in the US are insured by the federal government, but some are not. Private lenders are allowed to develop their own financial products and offer them to consumers. However, proprietary reverse mortgages come with a number or risks, including the risk of higher interest rates and fees, plus the risk that the borrower may not see all of their funds if the lender were to close their doors before the loan was paid fully.


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