HUD Seeks Public Input on the Future of HECM and HMBS Programs

The U.S. Department of Housing and Urban Development (HUD) is asking industry stakeholders, consumer advocates, and the public to weigh in on the future of the Home Equity Conversion Mortgage (HECM) and HECM Mortgage-Backed Securities (HMBS) programs. A Request for Information (RFI), published in the Federal Register on October 2, invites commentary on how well these programs are serving older homeowners and how they can be strengthened going forward.

HUD is specifically evaluating the role of HECMs in today’s housing finance landscape—especially as proprietary reverse mortgage products gain traction—and is seeking guidance on how to balance access to home equity with long-term sustainability, liquidity, and consumer protection.

The RFI includes 21 detailed questions, grouped into five major focus areas:

1️⃣ Program Performance, Market Role & Emerging Risks

HUD is examining whether HECM and HMBS programs are meeting their original policy objectives, how they affect innovation in the private market, and whether any current program features pose new risks to the Mutual Mortgage Insurance Fund or Ginnie Mae.

2️⃣ Consumer Interest & Demand

With declining borrower participation, HUD seeks insight into why seniors may be hesitant to use HECMs, how well consumers understand product terms and risks, and how HECMs compare to other home equity options.

3️⃣ Origination Volumes

The agency is exploring barriers that may be keeping lenders out of the reverse mortgage space and whether changes to loan features or program policies could bring more institutions back into the market.

4️⃣ Liquidity & Capital Markets

HUD is asking whether investors are facing unmet demand for HMBS and how changes to program design could improve issuer liquidity, execution, and long-term market stability.

5️⃣ Program Improvements & Policy Reform

Finally, HUD is inviting ideas on potential regulatory or statutory updates—ranging from servicing and underwriting standards to claim payments, lender insurance, Life Expectancy Set-Asides, and oversight of property maintenance.

Comments must be submitted by December 1.
HUD’s findings could inform future reforms to the HECM program and shape the reverse mortgage market for years to come.