Prop 19 + HECM for Purchase: How San Diego Homeowners 55+ Can Downsize Without a Mortgage Payment

If you've lived in your San Diego home for 20 or 30 years, you've probably had this thought: "This house is too big now… but if I move, my property taxes will jump and I'll have a mortgage again."

That worry keeps a lot of people stuck in homes that no longer fit their lives. The good news: two rules can work together to solve both problems. One protects your property tax. The other can remove the monthly mortgage payment on your next home.

Part 1: Prop 19 lets you take your low property tax with you

In California, your property tax is based on what your home was worth when you bought it (plus small yearly increases), not what it's worth today. If you bought in the 1990s, your tax bill is probably much lower than your neighbor's who bought last year.

Prop 19, which took effect in April 2021, lets homeowners 55 and older bring that lower tax value with them to a new home. Here are the basics from the State Board of Equalization:

• You must be 55 or older (or severely and permanently disabled) when you sell your current home.
• You can move anywhere in California, not just within San Diego County.
• You can use it up to three times in your lifetime.
• You must buy the new home within two years of selling the old one.
• If the new home costs more than the old one sold for, the difference gets added to your tax value. If it costs the same or less, you generally keep your old value.

Simple version: if you're downsizing, you can often keep paying taxes on your old, lower value.

Part 2: HECM for Purchase lets you buy with no monthly mortgage payment

A HECM for Purchase (also called H4P) is a reverse mortgage used to buy a home instead of borrowing against the one you already own. It's insured by the FHA and is for buyers 62 and older.

Here's how it works:

1. You sell your current home.
2. You put part of the money down on your new home. How much depends mostly on your age, interest rates, and the price of the home.
3. The reverse mortgage covers the rest.
4. You keep the leftover cash from your sale.

There's no required monthly mortgage payment. You still own the home and your name is on the title. You do still need to live there as your main home, pay your property taxes and homeowners insurance (and HOA dues, if any), and keep the home in good shape.

For 2026, the FHA lending limit for HECM loans is $1,249,125, up from $1,209,750 in 2025. That matters a lot in San Diego, where home prices are high.

Why the two work so well together

Think of it like this. The two biggest monthly costs of owning a home are the mortgage payment and the property tax. When you combine these two tools, you can shrink both at the same time:

• Prop 19 can keep your property tax close to what you pay now.
• H4P removes the required monthly mortgage payment.
• The result: a home that fits your life now (maybe single-level, maybe closer to family) and often more cash left in the bank than if you'd paid all cash.

A few things to know before you start

• Timing matters. Prop 19 gives you two years to buy, but planning the sale and purchase together makes everything smoother.
• You have to file a Prop 19 claim with the county assessor. Don't assume it happens on its own.
• A HECM requires a counseling session with a HUD-approved counselor before you apply. It's there to protect you, and it's a good place to ask questions.
• Bring your family into the conversation early. Adult kids usually have questions, and it helps when everyone hears the same answers.

Not sure if moving is right for you?

Start with my free guide, Stay, Move, or Use Your Equity? It walks you through six simple questions to help you figure out which path fits you best.

Or call me at 619-586-6196. I'll run the numbers on your situation, with no pressure.

This article is for general education only and isn't tax or legal advice. Prop 19 eligibility is decided by your county assessor; talk with a tax professional about your situation. Reverse mortgage borrowers must be 62+, occupy the home as their primary residence, and keep paying property taxes, homeowners insurance, and home maintenance. Amanda LaRussa, NMLS #2166834. Edge Home Finance Corporation, NMLS #891464. Equal Housing Opportunity.