Last Updated on April 2, 2026 by The HD Post Staff
CALIFORNIA — A lender is rolling out a new loan product targeting older homeowners, offering a way to tap home equity without monthly payments — but the long-term costs may be less clear.
Finance of America recently introduced “HomeSafe Second,” a second-lien reverse mortgage designed for homeowners age 55 and older. The product allows borrowers to access cash from their home while keeping an existing mortgage in place.
The timing reflects a shift in the housing market.
Homeowners across California are sitting on significant equity after years of rising home prices. The typical California home is worth around $775,000.
At the same time, higher interest rates have made refinancing less attractive — especially for those locked into low rates from prior years.
The new loan is positioned as a workaround.
Second loan behind existing mortgage
The product functions as a second loan placed behind an existing mortgage.
Borrowers must take an initial draw — typically at least 25% of the approved amount — with additional funds available over time.
Monthly payments are not required on the second loan, as long as they remain in the home and keep up with property taxes, insurance, and maintenance.
Interest accrues over time, and the balance is typically repaid when the home is sold, the borrower moves out, or dies.
Borrowers must still make payments on their original mortgage.
Different consumer protections apply
Reverse mortgage products aren’t without controversy.
The loan balance grows over time because interest accrues without monthly payments chipping it down.
If home values drop or a borrower remains in the home many more years than anticipated, the equity cushion can erode significantly.
Borrowers must also continue paying property taxes, homeowners insurance, and maintain the home — failing to do so can trigger repayment of the entire loan.
Finance of America’s HomeSafe products are proprietary. They are separate from the federally backed Home Equity Conversion Mortgage program, which has its own consumer protections and limits.
The company says the HomeSafe Second Line of Credit is currently available only in California, with other states planned through 2026.
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