Reverse Mortgage Closing Costs in Texas (2026)

If you are a Texas homeowner age 62 or older considering tapping your home equity, seeing the upfront fee categories on a reverse mortgage estimate can raise immediate questions about what you actually pay and why.

This 2026 guide breaks down reverse mortgage closing costs in Texas for FHA-insured Home Equity Conversion Mortgages (HECMs), including the mortgage insurance formula, the federal origination fee cap, third-party charges, and the unique consumer protections in the Texas Constitution.

Check Your Texas Reverse Mortgage Eligibility

By the end, you will know how each fee is calculated, which costs can be financed into the loan, and the exact timeline Texas law requires before you can close.

How HECM Closing Costs Work in Texas

This guide covers Home Equity Conversion Mortgages (HECMs), the reverse mortgages insured by the Federal Housing Administration (FHA). Under federal regulations (24 CFR 206.33), the youngest borrower on a HECM must be 62 or older at the time of loan closing. For a broader look at how these loans function, see our guide to Texas Reverse Mortgages.

When calculating hecm closing costs, the FHA uses a baseline figure called the Maximum Claim Amount (MCA). Both the initial MIP and the origination fee cap are figured from the MCA. On a HECM for Purchase, for example, the MCA is the lesser of the home's appraised value, the national HECM limit, or the sales price.

According to HUD Mortgagee Letter 2025-22, the published nationwide HECM MCA limit is $1,249,125 for case numbers assigned from January 1, 2026 through December 31, 2026 (up from $1,209,750 in 2025). That figure equals 150% of the $832,750 national conforming limit. Because FHA limits are updated annually, borrowers should always confirm the current published limit with a participating lender.

Breakdown of Reverse Mortgage Fees in Texas (2026)

Every FHA-insured reverse mortgage involves four main cost buckets: FHA mortgage insurance, the lender's origination fee, independent housing counseling, and customary third-party closing charges. Here is how HUD Handbook 4000.1 governs each one.

1. HECM Mortgage Insurance Premium (Initial and Annual)

The hecm mortgage insurance premium (MIP) is charged by the FHA. Under the Texas Constitution (Section 50(k)(3)), a reverse mortgage in Texas must also be a non-recourse loan, meaning neither the owner nor the spouse has personal liability for the debt.

According to HUD Handbook 4000.1 and the Consumer Financial Protection Bureau (CFPB), you pay MIP in two parts:

• Initial MIP (2%): Charged at closing and equal to 2% of the Maximum Claim Amount. Under HUD rules, the initial MIP may be financed into the loan or paid in cash by the borrower and/or the lender.
• Annual MIP (0.50%): Charged at an annual rate of 0.50% of the outstanding loan balance, accruing from closing and payable monthly.

2. Loan Origination Fee (FHA Cap Formula and Examples)

HUD Handbook 4000.1 caps the loan origination fee on a HECM. The maximum origination fee a lender may charge is the greater of $2,500, or:

• 2% of the first $200,000 of the Maximum Claim Amount, plus
• 1% of the portion of the Maximum Claim Amount above $200,000
• Maximum cap: $6,000 total

Lenders are permitted to charge less than the FHA cap, and the origination fee may be fully financed into the loan.

Here is how the FHA origination fee cap works alongside the 2% initial MIP at different illustrative Maximum Claim Amounts (all below the $1,249,125 limit):

Check Your Texas Reverse Mortgage Eligibility

3. HUD-Approved Reverse Mortgage Counseling Fee

Before a HECM can move forward, federal regulations (24 CFR 206.41) require the borrower, any Eligible or Ineligible Non-Borrowing Spouse, and any non-borrowing owner to receive counseling from a HUD-approved HECM counselor.

No current official fixed dollar amount was found for this fee, so it varies by agency; ask the agency what it charges. These consumer rules apply under HUD Handbook 4000.1, HUD Mortgagee Letter 2011-09, and CFPB guidance:

• Reasonable and affordable: Agencies may charge a reasonable fee that is commensurate with the services provided and does not create a financial hardship. According to the CFPB, an agency cannot charge you if you cannot afford it.
• Fee deferral for lower-income clients: Agencies should not collect a counseling fee at the session from clients whose income is below 200% of the federal poverty level, though they may charge such clients at closing if the fee amount was disclosed in advance.
• Can be paid at closing: HUD lists the HECM counseling fee as an allowed Mandatory Obligation that can be paid at closing.
• Lender independence: Lenders may not pay counseling agencies or counselors for HECM counseling.

4. Third-Party Reverse Mortgage Closing Costs

In addition to FHA mortgage insurance, the origination fee, and counseling, reverse mortgage fees texas borrowers see on their closing statement include standard third-party settlement services. Under HUD Handbook 4000.1, a lender may collect customary and reasonable amounts—and no more than what was actually paid to the third party—for the following items:

• Appraisal
• Credit report
• Property survey
• Title examination and lender's title insurance
• Recording fees and taxes
• Flood certification
• Third-party property tax verification
• Repair administration fee

Because third-party fees depend on your property, county recording schedules, and title company charges, you should ask your lender for an itemized estimate for your specific property.

How Reverse Mortgage Closing Costs Are Paid

Under HUD Handbook 4000.1 rules:

• Origination fee: May be fully financed into the loan balance.
• Initial MIP (2%): May be financed into the loan or paid in cash by the borrower and/or the lender.
• Counseling fee: Can be paid at closing as an allowed Mandatory Obligation; lower-income clients below 200% of the federal poverty level should not be charged at the session.
• Third-party costs: The lender may collect customary and reasonable amounts, no more than actually paid. Ask your lender how these will be paid on your loan.

Costs you finance become part of your loan balance, and the 0.50% annual MIP is charged on the outstanding balance. Under the Texas Constitution, interest may accrue and compound, and the rate may be fixed, adjustable, or contingent on appreciation. Because rates change daily, a participating lender can quote today's rate.

HECM for Purchase Closing Costs in Texas

You do not have to stay in your current house to use a reverse mortgage. Under HUD Handbook 4000.1 (Section II.B.8.a) and the Texas Constitution (Section 50(k)(4)), a HECM for Purchase lets an eligible borrower buy a new principal residence and obtain a reverse mortgage in a single transaction. Under Section 50(k)(6), no principal or interest payment is due until a triggering event, such as the death of all borrowers or the sale of the home.

If you are sizing up a HECM for Purchase in 2026, keep these HUD rules in mind:

• How the MCA is set: For a purchase, the Maximum Claim Amount is the lesser of the home's appraised value, the $1,249,125 national HECM limit, or the sales price. Both your 2% initial MIP and your origination fee cap are calculated from this figure.
• Paying the Initial MIP: Just as with a standard HECM, the 2% initial MIP on a HECM for Purchase must be financed into the loan or paid in cash.
• Eligible properties: You can buy an existing or new-construction 1-to-4 unit property (as long as you occupy one unit as your principal residence), a site-built home, a condo in an approved project, or a manufactured home.
• Occupancy and title: Title must transfer to you at closing, the first lien (and second lien, if any) must be the only liens on the property, and you (along with any Eligible Non-Borrowing Spouse) must occupy the new home within 60 days of closing. If you have an existing HECM on your prior home, it must be paid off first.

Check Your Texas Reverse Mortgage Eligibility

Texas-Specific Rules: Section 50(k) of the Texas Constitution

Texas has its own constitutional rules for borrowing against a homestead. While home equity loans fall under Section 50(a)(6)—which you can read about in our guide to Texas Home Equity Loan Rules & HELOCs—reverse mortgages in Texas are governed by Article XVI, Section 50(a)(7) and Section 50(k)–(p) and (v) of the Texas Constitution.

Before you can close a reverse mortgage in Texas, the law enforces specific timing, signature, and fee rules:

• 12-Day Constitutional Notice Waiting Period: Under Section 50(k)(9), a reverse mortgage may not close before the 12th day after the lender provides the borrower with the official written notice ("IMPORTANT NOTICE TO BORROWERS RELATED TO YOUR REVERSE MORTGAGE") on a separate instrument. Both the lender (or originator) and the borrower must sign the notice for it to take effect.
• Texas Counseling Window (5 to 180 Days): Under Section 50(k)(8), both the borrower and the borrower's spouse must attest in writing that they completed counseling on reverse mortgages and other financial alternatives no earlier than 180 days and no later than 5 days before closing.
• Consent of Each Owner and Spouse: Under Section 50(k)(1), a Texas reverse mortgage requires the voluntary written consent of each owner and each owner's spouse.
• No Per-Advance Fees or Card Access: Under Section 50(v), once a Texas reverse mortgage is established, the lender may not charge any transaction fee for advances made after closing, and borrowers may not access funds using a credit card, debit card, or preprinted check.
• Refinancing a Texas Home Equity Loan: Under Section 50(f)(1), if you currently have a Texas Section 50(a)(6) home equity loan on your homestead, Texas law allows you to refinance it into a reverse mortgage.

Ongoing Homeowner Obligations and Property Tax Exemptions

Even though no principal or interest payment is due while the loan is in good standing, Section 50(k)(6) of the Texas Constitution lets payment become due if all borrowers stop living in the home for more than 12 consecutive months without the lender's written approval, or if the borrower defaults on property taxes, insurance, or repairs. (The Section 50(k)(9) constitutional notice also specifically explains that taking out a reverse mortgage can cause the possible loss of a Texas property-tax deferral, along with explaining the grounds for foreclosure and your right to a cure notice.)

To keep your ongoing property tax bill as low as possible, review our Texas Homestead Exemption Guide (2026) and our guide to Texas Property Tax Exemptions for Seniors (2026).

Next Steps for Texas Homeowners

Understanding reverse mortgage closing costs texas rules comes down to knowing the federal formulas and the Texas calendar: a 2% initial MIP, an origination fee cap of $2,500 to $6,000 depending on the MCA, required counseling completed 5 to 180 days before closing, and a 12-day wait after the lender provides the Texas constitutional notice.

Because lenders can charge less than the maximum origination fee and third-party title and appraisal fees vary by county, the best way to see your exact numbers is to review a personalized loan comparison. Our team can help you check your eligibility, compare options, and get connected with a participating lender for a transparent breakdown of costs and net proceeds.

Check Your Texas Reverse Mortgage Eligibility