Basically there are three types: federally insured loans that follow rules set up by the U.S. Department of Housing and Urban Development (HUD), privately insured loans from nongovernment lenders, and uninsured private loans.

Federally insured loans are subject to stricter requirements and tend to have lower lending limits than private reverse mortgages, but they offer the security of government backing. Privately backed reverse mortgages may offer more options -- for example, allowing homeowners to mortgage less than the full value of their house, which government-backed loans typically require -- but they may involve higher costs than government-insured loans.

Uninsured loans usually provide monthly payments for a fixed term. Unlike insured reverse mortgages, which are due only if the homeowners sell their house or in other strictly qualified circumstances, uninsured reverse mortgages are usually due in full at the end of the term.