In New Jersey, a reverse mortgage lets homeowners skip monthly principal and interest payments and borrow against a local median home value of $530,000. The Home Equity Conversion Mortgage (HECM), insured nationwide by the Federal Housing Administration, is what most borrowers select. Between October 2025 and August 2026, 620 HECMs got insured in New Jersey, and 27 hit the federal $1,249,125 lending limit. The median initial principal limit that borrowers received was $246,862 and the median note rate was 5.875%. The total cash you can draw before loan costs is your principal limit.
Up to $6,500 in property tax relief through Form PAS-1
Federal reverse mortgage rules say you must keep the home as your main residence and maintain it well. You must also pay your homeowners insurance and property taxes by the due dates. Falling behind on property taxes triggers a default on your loan, which means the terms are broken and foreclosure becomes possible. Those bills are easier to handle with state tax relief.
Eligible homeowners who are 65 or older and earn up to $200,000 can get property tax benefits through the Stay New Jersey program. For incomes between $0 and $100,000, the largest benefit is $6,500. For incomes between $100,000.01 and $150,000 the limit becomes $5,000, and between $150,000.01 and $200,000 it drops to $4,000. For every one of the 12 months in 2025, you or your spouse must have owned the home and lived in it. People who rent or own a mobile home aren't eligible. By November 2, 2026, you file 1 Form PAS-1 application that covers Senior Freeze, ANCHOR and Stay New Jersey benefits.
The age 60 requirement and the proposed Senate Bill S2520
According to the legislative statement for Senate Bill S2520, current New Jersey law says you must be at least 60 to get a reverse mortgage. You must still be at least 62 to get a federal HECM loan. Senate Bill S2520 was introduced in February 2024 to add more rules, but it remains a proposal and hasn't become law.
How would Senate Bill S2520 affect counseling and the right to cancel?
If it becomes law, proposed Senate Bill S2520 would mean your pre-loan counseling has to happen in person, through a HUD-approved agency. New Jersey has 5 HUD-approved counseling agencies right now. Your counseling certificate would be valid only if its date fell at least 3 working days before closing, and it would expire after 180 working days. For counseling violations, the Commissioner of Banking and Insurance could charge the lender a $1,000 civil penalty that gets paid to you. Any loan made without the counseling the law requires would be void and couldn't be enforced.
The bill would also give you a 7-day right of rescission once you've accepted the lender's written commitment in writing. With a right of rescission, you can cancel the loan without any penalty. You couldn't give up that 7-day window, and it wouldn't take away the 3-day federal rescission right you have.
Lender oversight and the New Jersey Department of Banking and Insurance
State agencies can help with disputes as you compare New Jersey's 95 active lenders for reverse mortgages. Banking, insurance and real estate businesses are regulated by the New Jersey Department of Banking and Insurance, which also handles complaints from consumers. The New Jersey Division of Consumer Affairs looks into consumer complaints too. If it can't help, it refers you to another state or federal office.
