State law requires counseling before the closing for the reverse mortgage Rhode Island homeowners get, which lets you take a loan against your home value. Among borrowers 62 and older, most go with a Home Equity Conversion Mortgage, or HECM. It's a federal FHA loan that converts some of your equity into cash while you continue living in the home. Between October 2025 and August 2026, HUD backed 91 HECMs in Rhode Island, an increase from 90 during fiscal year 2025.
The 180-day window to close and the 3-business-day counseling wait
For every reverse mortgage, Rhode Island counseling law says you must complete a counseling program. The counselor walks you through the expenses so you can make a choice free of sales pressure. Your lender has to provide at least 3 HUD and FHA approved independent counseling agencies. They're not allowed to direct you toward an agency they're connected to. Right now, there are 0 HUD approved agencies located in Rhode Island, so you'll speak with one based out of state.
A signed counseling certificate must be in the lender's hands 3 working days or more before you close. This break lets you think it over. You're also required to close within 180 days after you sign the certificate, or you'll have to go through counseling again.
Does Rhode Island allow a lender to demand you purchase an annuity or to charge a penalty for early payoff?
No, Rhode Island loan rules prohibit a lender from forcing you to buy an annuity to obtain your loan. You buy an annuity, an insurance contract, to get income later. The money from your loan belongs only to you. That same law allows you to repay a portion or the full amount of your reverse mortgage ahead of schedule with no penalty. Making an early payment on your balance is referred to as prepayment. You may do this when you sell the house or refinance. An exception exists, but only in the narrow case where the lender gave up its usual fees.
Median loan limit of $257,040, property taxes and the 120 day absence rule
For short term absences of up to 120 straight days, state law offers you protection. Your loan won't become due from a trip or hospital stay of 120 days or fewer. Federal rules that apply in every state say you must live in the house as your main home and maintain it. On top of that, you're obligated to pay property taxes and homeowners insurance when due.
From October 2025 to August 2026, the 91 Rhode Island HECMs that were insured had a median home value of $515,000. The median initial principal limit borrowers received was $257,040, with a median note rate of 5.625%. Think of your initial principal limit as the loan amount you start with, before clearing any old mortgage or fees. Over that span, 12 homeowners refinanced a HECM, 1 purchased a home and 5 reached the 2026 nationwide lending limit of $1,249,125.
Is the Rhode Island Division of Banking in charge of lenders and complaints?
Yes, through its Division of Banking, the Rhode Island Department of Business Regulation oversees both licensed lenders and loan brokers. As you compare lenders for a Rhode Island reverse mortgage, this state office regulates their operations. Its oversight also covers check cashers, money transmitters and small loan lenders. The Division of Banking's mailing address for complaints is 1511 Pontiac Avenue in Cranston. Put it in writing, as the division needs more than a phone call to take action.
