FHA's Reverse-Mortgage Fund Holds $16.6 Billion. The Office That Vets Borrowers Is Budgeted at Zero.

A reverse mortgage lets a homeowner, almost always a senior, borrow against the house and never make a payment while they live in it — the loan comes due when they move out, sell, or die.▸ FHA insures nearly all of them through the Home Equity Conversion Mortgage (HECM) program, and by law a borrower cannot get one without sitting through independent counseling first. That counseling is the only mandatory check in the entire transaction that isn't run by the lender selling the loan. The fund it protects is healthy. The office that pays for it is not.

FHA's Mutual Mortgage Insurance Fund carries a separate reverse-mortgage book, and by the numbers it isn't in trouble.▸ As of September 30, 2025 the HECM portfolio's insurance-in-force — the unpaid balance on every active loan FHA is on the hook for — stood at $63.740 billion, and the independent actuary hired by HUD put the fund's Economic Net Worth — cash on hand plus the present value of everything the fund expects to collect and pay out on existing loans — at a positive $16.603 billion. That's real capital cushion. It's also $818 million thinner than the $17.421 billion the same fund held twelve months earlier, a 4.70% decline driven mostly by a drop in projected cash flow that the actuary attributes to a higher-rate, slower-refinance environment. Meanwhile the program kept growing: FHA endorsed 28,149 new HECM loans in FY2025, up 6.2% from 26,502 the year before, carrying a combined maximum claim amount of $14.96 billion.

Every HECM borrower — and every spouse, even a non-borrowing one — must complete counseling from a HUD-approved agency before a loan can close, walking through eligibility, loan costs, alternatives, and what happens to the loan balance over time.▸ It's the one part of the process where the person explaining the loan doesn't get paid if the loan closes. As of HUD's most recent published count, in its fiscal year 2025 budget justification, that safeguard rested on 367 HECM-certified counselors nationwide — a subset of the 4,040 HUD-certified housing counselors working across more than 1,550 approved agencies. Spread across FY2025's 28,149 new endorsements, that's roughly 77 new HECM loans a year for every certified counselor in the country, before counting the refinances, repeat consultations, and non-HECM housing counseling the same workforce also covers.

That workforce runs entirely on one HUD line item, Housing Counseling Assistance, funded at $57.5 million in both FY2025 and FY2026.▸ The Administration's budget has now asked Congress to zero it out two years in a row. The FY2026 budget justification proposed eliminating it; Congress funded it anyway, at the full $57.5 million, in the Consolidated Appropriations Act, 2026 (P.L. 119-75). The FY2027 budget justification asks again — its own text says flatly the budget "eliminates funding for the Housing Counseling Assistance program." This time Congress isn't proposing to fully reverse it: the House Appropriations Committee's opening mark, approved 34-27 on June 3, 2026 after a subcommittee vote on May 21, funds the program at just $26 million — 55% below the current level — with the Senate not yet having released a competing bill. Nothing here is enacted; FY2027 doesn't start until October.

Nothing in either budget justification argues the counseling requirement itself should go away — a borrower would still, by statute, have to talk to someone before signing.▸ What the zero-dollar request removes is the federal grant that keeps 367 people certified, trained, and staffed at agencies to do that talking for free. The fund those borrowers are signing into remains solvent. The office standing between them and the paperwork is the one on the chopping block.

Figures are as of fiscal year-end September 30, 2025 for the HECM fund and endorsement data, and reflect the most recent HUD-published counselor count (FY2025 budget cycle) and the FY2027 appropriations process as of early June 2026; the House Committee mark is a proposal, not enacted law.