Do I Qualify?
If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, or have the ability to pay down your outstanding mortgage balance, and are currently living in the home, and are eligible, you may participate in FHA's Home Equity Conversion Mortgage (HECM) program – also called a reverse mortgage. A reverse mortgage enables qualifying homeowners the ability to withdraw some of the equity in their home or get a single disbursement lump-sum payment at the time of mortgage closing.
A reverse mortgage can also be used 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.
There are borrower and property eligibility requirements that must be met. Have questions about whether or not you qualify? Complete the the reverse mortgage questionnaire and we will contact you with answers. We'll discuss the requirements of the reverse mortgage program, the loan approval process and repayment terms.
To qualify, you must:
- Be 62 years of age or older
- Own the property outright, paid-down a considerable amount of the mortgage, or have the ability to pay down a considerable amount of the mortgage
- Occupy the property as your principal residence
- Not be delinquent on any federal debt
- Have financial resources to continue to make timely payment of property charges such as property taxes, insurance, etc.
- Participate in a consumer information session given by a HUD-approved HECM counselor
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
- Income, assets, monthly living expenses, and credit history will be verified to make sure you are still able to pay your property taxe and homeowners insurance payments
- Timely payment of real estate taxes, hazard and flood insurance premiums will be required
You may be eligible for one of the following payment plans:
- Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
- Term - equal monthly payments for a fixed period of months selected.
- Line of Credit - unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
- Modified Tenure - combination of line of credit and scheduled monthly payments for as long as you remain in the home.
- Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
- Single Disbursement Lump Sum - a single payment at loan closing.
If eligible, you can change your payment plan option for a fee of $20.
The amount you may borrower will depend on:
- Age of the youngest borrower living in the home
- Current interest rate
- Lesser of appraised value or the HECM FHA mortgage limit or the sales price
- Initial Mortgage Insurance Premium
Find out if a reverse mortgage is right for you.Reverse mortgages are available to most home owners that are 62 years of age or older with equity in their home. To find out if you qualify or to get your questions answered, please contact us for a no-obligation, no-pressure consultation. We're local mortgage professionals that will provide straight and honest answers without the hard sell.