Reverse Mortgages are designed for those age 62 and older. FHA through HUD (Housing and Urban Development) provides the most popular Reverse Mortgages. It is called the HECM,
The HECM is FHA's reverse mortgage program that enables you to withdraw some of the equity in your home with limitations or a single disbursement lump-sum payment at the time of mortgage closing.
You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
How the Program Works
There are many factors to consider before deciding whether a HECM is right for you. To aid in this process, Call a National One Reverse Mortgage Specialist. 1-800-429-4443. Counseling is required on all Reverse Mortgage loans. It is designed so seniors are fully informed about the loan befoe making a decision. You can search online for a HECM counselor or call toll-free.
Borrower Requirements
You must:
- Be 62 years of age or older
- Own the property outright or paid-down a considerable amount
- Occupy the property as your principal residence
- Not be delinquent on any federal debt
- Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
- Participate in a consumer information session given by a HUD- approved HECM counselor
Property Requirements
The following eligible property types must meet all FHA property standards and flood requirements:
- Single family home or 2-4 unit home with one unit occupied by the borrower
- HUD-approved condominium project
- Manufactured home that meets FHA requirements
What are the borrower’s obligations after the loan closes?
• Occupy the home as a principal residence
• Make timely payments of their property taxes
• Maintain homeowner’s hazard insurance
For fixed interest rate mortgages, you will receive the Single Disbursement Lump Sum payment plan.
Mortgage Amount Based On
The amount you may borrower will depend on:
- Age of the youngest borrower or non-borrowing spouse
- Current interest rate
- Lesser of appraised value or the HECM FHA mortgage limit of $625,500 or the sales price; and
- Initial Mortgage Insurance Premium
